How can you earn income from biomass?

How to earn an income from biomass

Commercial energy rates are set to double in the next five years. Secure your supply and earn an income from biomass heating. Biomass offers a reliable alternative heat source that is low cost and generates additional revenue from the RHI.

How does it work?

The RHI (Renewable Heat Incentive) will pay you for all heat generated from your biomass heating system. This rate is guaranteed for 20 years and like the Feed in Tariff, increases with RPI. RHI tariff rates are being reduced incrementally, with the latest cuts taking place in April 2015, but once you sign your rates are guaranteed for 20 years.

In addition to the RHI payments, you will make considerable savings on your existing fuel costs. This is particularly true for those who are dependent on oil or LPG; biomass fuel is up to 50% cheaper than heating oil and unlike the traditional fossil fuels, it is not subjected to the same unpredictable price fluctuations. Our blog on biomass fuel prices investigates how prices have varied over the last 15 years in comparison to fossil fuels.

Combined savings and revenue from the RHI make biomass an attractive investment opportunity, particularly for those who are off-gas or have a high heat demand.

Worked example:

As of April 2015 the RHI pays out 5.87p per kWh for the heat your small commercial biomass system generates.

Here is an example appraisal that indicates the cost and returns from a biomass wood chip boiler under the new RHI rate:

120kW boiler £57,315

Existing fuel type Heating oil

Existing fuel cost 6.4p / kWh

Wood chip fuel cost 4.1p / kWh

Year 1 fuel savings £3,627.00

Year 1 RHI income £9,114.00

Payback period 4.3 years

After the 20-year RHI agreement term we would expect the total savings and revenue to be in the region of £285,364. This figure assumes a modest fuel price increase of 5% per year for the existing fuel and 3% per year for the wood chip

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Arrange a free no-obligation survey with Mike, our Biomass Expert, to find out if a biomass system is right for you.