New figures reveal it pays to be green

Cash-strapped businesses and local authorities facing soaring energy bills are turning to renewable heating options after discovering the Renewable Heat Incentive could pay out more than the fuel actually costs.

New figures from Welshpool-based Organic Energy show the Renewable Heat Incentive could see businesses and councils save thousands of pounds on traditional fuel bills, with eligible heating installations attracting payments of up to £6,500 a year.

The Renewable Heat Incentive for the non-domestic sector was introduced on November 28 and includes industrial and commercial installations, as well as those for the public sector, not-for-profit organisations and charities. It will see tariffs paid on a quarterly basis for a 20-year-period.

The figures have been released by Organic Energy, one of the forerunners of low carbon heating technology in the UK. The company is the sole UK  distributor of ÖkoFEN wood pellet boilers, regarded as the most advanced and efficient of their kind in the world.

Managing director of Organic Energy, Andy Boroughs, said the figures showed the levels of incentive ÖkoFEN wood pellet boilers could attract, based on average fuel consumption.* And he advised businesses that they could also take advantage of capital allowance against tax as well as reclaiming VAT against the cost of the system and fuel.

Mr Boroughs said: “We're delighted to see the introduction of the Renewable Heat Incentive and be able to demonstrate how much money both private and public sector organisations can save by installing green heating solutions.

“A 56kw ÖkoFEN automatic boiler using an average of 22.4 tonnes of wood pellets a year can attract an incentive of  £6,491.86, compared to the cost of the fuel at £5,152 ex VAT.  At the other end of the scale, the 8kw boiler will attract £927, against a pellet cost of £736. It effectively means that businesses, communities or organisations which install these systems will be paid more via the incentive than the cost of the fuel which they are using.

“When you add in the Renewable Heat Premium Payment already available, which is £950 towards the cost of installing a wood pellet boiler, this will make financial sense to businesses. And of course, the RHPP is already available to domestic customers but they will have to wait until next year to take advantage of the RHI.”

However Mr Boroughs urged potential buyers of renewable heating systems to get expert advice before ordering, to ensure the installation would be eligible for the incentive.

“There are several regulations governing which projects will be eligible and we'd suggest  going through the small print carefully or contacting us for advice,” he added.

Wood pellet boilers and solar thermal heating are both eligible for the scheme, and all qualifying installations commissioned on or after the 15 July 2009 can receive support. Equipment and installers must be MCS or Solar Key mark accredited for the systems to attract the RHI.

All applications for the RHI must be made to Ofgem,which is the administrator of the scheme.

Anyone would would like more information or guidance on the RHI and the potential eligibility of projects can contact Organic Energy on 01938 530070 or email info@organicenergy.co.uk