In mid December the Government provided its response to the Reformed and Refocused RHI consultation, which gave details of how the incentive scheme will operate post 31st March 2017.
Now the dust has settled and we have had time to digest the detail Ashwell Biomass (The UKs original biomass specialists) feels the scheme remains advantageous and provides a suitable platform to support the continued growth of the biomass and renewables industry.
The key points of the new scheme are: For Domestic Biomass installations
The tariff to will increase to 6.44p per kWh, but with a cap of 25,000kWs per annum introduced.
Therefore a domestic property with a heating and hot water demand in excess of 25,000kWs will receive £1,610 per annum, equating to £11,270 over the 7 year domestic RHI period. For non Domestic/Commercial installations
The new non Domestic/Commercial tariff will cover all sizes of boiler installation at rates of 2.91p per kWh (Tier 1) and 2.05p per kWh (Tier 2). The tier 1 threshold will increase to 3,066 running hours (35% of the plant's capacity x 8,760 running hours per annum), benefiting installations with longer running hours.
There is always the temptation to compare the current scheme with the forthcoming reformed scheme and to give an illustration (assuming the boilers run for 3,066 hours per annum) we have put together the following table. Boiler size (kW) 100 300 500 950 1,900
(£ payback p/a) 8,922 26,766 44,610 84,760 169,520
(£ payback 20 years) 178,440 535,320 892,200 1,695,200 3,390,400
(£ payback p/a) 5,243 32,587 54,312 103,193 119,421
(£ payback 20 years) 104,860 651,740 1,086,240 2,063,860 2,388,420
Notes: Figures are for illustrative purposes only and 20 year payback figures exclude annual increases linked to ROI
You can see that scheme remains very attractive, particularly for systems capable of running for longer running hours (ie 3,066 per annum). With paybacks increasing for smaller installations (up to 199kW) and also larger 1MW+ projects.
Also taken on its own merits payback for medium sized installations (ie those with a capacity of 200-999kW) with longer running hours is very positive.
To aid decision making for larger biomass installations (ie those 1MW+) a tariff guarantee has been introduced, meaning that once the project is registered the window for the design and installation is increased without the fear of the tariff being degressed.
Full details about the new scheme can be found: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/577024/RHI_Reform_Governme...
Ashwell Biomass are one of the UK's original and leading biomass specialists. For further detail about whether a biomass boiler installation is right for you, contact us on: 0116 2604050; firstname.lastname@example.org