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Businesses warming to renewable heat

Research on renewable heating systems installed under the Renewable Heat Incentive shows that the vast majority of businesses are satisfied with their installation and would recommend it to others.

Research on renewable heating systems installed under the Renewable Heat Incentive (RHI) shows that the vast majority of businesses are satisfied with their installation and would recommend it to others.

The RHI scheme provides a 20-year subsidy to businesses installing eligible renewable heat technologies such as biomass boilers and heat pumps. The aim of the initiative is to encourage businesses to use replace fossil fuel-based heating systems with cleaner alternatives.

Nearly 90 per cent of applications to the RHI are for small biomass boilers that are less than 200kW in capacity.

According to results from a new government survey, 87 per cent of non-domestic applicants to the scheme are satisfied with their installation would recommend it to others.

The importance of the RHI was also emphasised by the fact that 63 per cent of businesses said they would not have installed their renewable heat technology without it.

Multiple savings

As well as making savings on energy costs, some manufacturers are able to make extra savings with biomass boilers by using operational waste that would otherwise go to landfill as fuel.

For example, Axiom Displays, a retail display manufacturer in Oldham, is saving over £100,000 a year with its biomass boiler – with nearly half of this resulting from reduced waste costs by using its own waste wood as fuel.

Similarly, Crystal Doors, a door manufacturer in Rochdale, is saving around £80,000 a year with its biomass boiler, which is also completely fuelled by waste wood from on-site operations. 

Finance

The survey shows that nearly two thirds of applicants used resulting savings to pay for the capital costs of installing their new heating system, although an increasing number were turning to bank loans and asset finance packages.

In the 2015 Autumn Review, the Government committed to providing £1.15 billion in funding for the RHI by 2021. The scheme is currently being reviewed, with new reforms expected to be put in place within the next few months. 

Lord Bourne, energy minister at the Department of Energy and Climate Change (DECC), said: “Reforming how we use energy for heating is critical to achieving secure, affordable and clean energy for families and businesses across the country. That is why the government will be pushing a more cost effective, targeted Renewable Heat Incentive scheme for the next five years.”

‘Huge potential’

The Renewable Energy Association (REA) welcomed the findings that showed that the RHI could soon help to deliver over 800MW of new renewable heating capacity a year as technology costs come down.

Frank Aaskov, policy analyst at the REA, said: “There is always room for improvement, both in the RHI and within the [renewable heat] sector, but it is clear that biomass heating is a modern and mature technology that has huge potential.”