Buy, Lease or Rent Biomass Boilers? Compare ROI

If you?re currently running oil-fired boilers, switching to a biomass boiler can save you £000?s each year in fuel bills, and with the financial rewards from the Government?s Non-Domestic Renewable Heat Incentive, you could even see a 12% return.

However, you should be aware that if you take a company up on their offer of a free biomass boiler, then they would claim your RHI pay-outs as payment for the installation.

Biomass wood pellet boiler and storage with autofeedAs with solar panels, the financial earnings from biomass, or pellet boilers, are huge, so if you can pay for your boiler yourself you should do so! If you can?t afford the upfront cost of a biomass installation, there are other options, such as our leasing plan.

What is the Non-Domestic RHI?

The Government has to meet EU targets to reduce UK carbon emissions by 2020, and a large chunk of the CO2 reductions has to come from reducing the emissions from the energy used to heat our commercial properties. So they?ve introduced the Non Domestic Renewable Heat Incentive (RHI), which rewards businesses for using renewable energy to heat their buildings ? such as switching to carbon-neutral biomass boilers.

The Commercial RHI scheme pays you quarterly over 20 years for the heat you generate from your biomass boiler. Using a 199kW biomass boiler as an example, you would receive £23,000 p.a. for 20 years, plus your bill savings of around £8,700 p.a. if you were switching to biomass from oil.

What is a biomass boiler?

A biomass boiler is a highly efficient boiler that burns wood chips or wood pellets. It can be automatically fed (so you don?t have to keep topping it up) and, in most cases, connects straight to your existing heating system.  Although during burning, biomass releases CO2, whilst it is growing it absorbs CO2 – making biomass a carbon-neutral fuel.

Biomass boilers are particularly suitable for rural properties running LPG or oil-fired boilers. The new generation of biomass boilers provides a brilliant alternative and can directly replace your current boiler, using wood pellets or chippings as the fuel source for either space or water heating.

What are the options for funding a biomass boiler installation?

There are three ways to fund your Biomass Boiler:

  • Pay for the boiler yourself. This is by far the best option if you can afford to as you will receive all the pay-outs from the Renewable Heat Incentive.
  • Lease the boiler using Energy Efficiency Financing. We?re now offering Energy Efficiency Financing through our partnership with Siemens Financial Services and The Carbon Trust ? so you can lease your new biomass boiler and use your RHI rewards to cover the lease payments.  Here?s how it works:Example of Your Financial Benefits – based on a 199kW Biomass Boiler
    RHI payments to you £23,000 p.a. (index linked) for 20 years
    Your fuel bill savings £8,700 p.a.
    Lease payments to Siemens £22,080 for 7 years
    Total financial benefit to you £479,000 over 20 years!
  • Opt for a free biomass installation where you will benefit from the bill savings ? which can still add up to a considerable sum – BUT you sacrifice the lucrative RHI payments.

Why wouldn?t a free biomass boiler be the best option?

It may be the best option for you if you are genuinely unable to lease or raise the capital to fund your new biomass boiler installation. Our advice is to explore all possible avenues for self-funding or leasing your boiler as the financial rewards are so high. You may also still face rising fuel bills with a free biomass boiler option as you will have to sign a purchase agreement for the boiler?s heat production with the supplying company.

Arrange a FREE suitability consultation

As official partners of Siemens Financial Services and The Carbon Trust, your local EnergyMyWay director can visit your premises to give you full details of the RHI scheme and to provide advice on your property?s suitability for a biomass boiler.

By: Louisa Stockley