Farms considering renewables are in a good position to invest following the recent announcement of the Government’s continued commitment to renewable heat in the Chancellor’s first Comprehensive Spending Review of this Parliament.
George Osborne said the Government remained committed to meeting its 2020 renewable energy targets and will increase funding for the Renewable Heat Incentive (RHI) to £1.15 billion by 2020-21, while reforming the scheme to deliver better value for money.
We’ve been concerned that the Government’s commitment to the renewable energy sector was waning, having seen a significant fall in financial support for the solar PV market and renewable heat heading the same way, so this news is very welcome.
Since 2011 over 24,700 biomass heat systems have been installed in homes, schools, hospitals, hotels and commercial businesses including farms. By the end of this Parliament the Government expects to have incentivised enough additional renewable heat to warm the equivalent of over 500,000 homes.
The new commercial RHI tariff, applicable to farms, of 3.76p per kWh for a 199kW system or below could earn you approximately £2,500 per year for 20 years for a 50kW system and approximately £5,000 per year for a 100kW system. The domestic RHI tariff, available for seven years is also still a good investment to consider if commercial sizes are not suitable.
The growth of the biomass industry shows there is an alternative way for people to heat their homes and businesses without using fossil fuels. Whether it is a wood chip, wood pellet, or a wood log system, the supply chain has matured to offer cost-effective solutions that benefit the user and the environment.
Biomass heat is a success story for farmers, landowners and those living off the mains gas grid by providing a low cost, low carbon heat solution. We have installed over 2,000 biomass systems in the UK and anticipate many more in the years to come, with farms in particular taking advantage of the new RHI tariff rates.