Free Biomass – the pros and cons
The benefits of biomass boilers have been widely documented – they allow property owners the opportunity to benefit from significantly reduced heating bills, entitlement to Renewable Heat Incentive (RHI) and to increase their green credentials. However, they are expensive to purchase (requiring either a large initial capital outlay or access to asset finance) and require regular maintenance.
A number of companies have now entered the market offering “Free Biomass” systems whereby they will supply and install a biomass boiler free of charge in a suitable property. In addition they will deal with planning permission and look after all ongoing maintenance of the system. In return for this the system provider will be entitled to receive the RHI payments attached to the boiler system over the 20 year term.
Suitable properties are usually those located in rural areas where mains gas is not available. Typically the type of property where biomass offers the most benefit are those used as hotels, care homes, garden centres, golf clubs and leisure centres where there is a constant requirement for heating and hot water.
The main benefits of “Free Biomass” for the property owner are:
– Fuel saving (the difference between the cost of oil and cost of wood pellets)
– No up-front capital cost (or need to sign up to an asset finance agreement)
– No maintenance for 20 years
– A % share of the RHI
Clearly, one of the major attractions to many property owners of installing biomass is the opportunity to receive a significant annual income in the form of RHI payments from the government. With “Free Biomass” all but a small proportion of the RHI will go to the provider of the boiler system. However, the high capital costs of buying and funding the biomass system are often prohibitive to many property owners. A “Free Biomass” scheme however still offers the opportunity to benefit from savings on fuel costs and maintenance plus the ongoing receipt of a proportion of the RHI without any up-front costs.