The launch of the Renewable Heat Incentive on 10th March 2011 is
set to help farmers and rural businesses invest in renewable heat
technologies, reducing costs and carbon footprints.
The £860 million government scheme is the first of its
kind in the world, providing long term support for renewable heat
technologies. Subsidies will be paid to those who install the
technology which includes, biomass boilers, energy from waste
combustion, ground source heat pumps, deep geothermal and the
injection of biomethane into the grid.
Rebecca Seaman of Fisher German sees this as a great benefit to
many farmers and other rural businesses. "The RHI will provide the
opportunity for rural businesses to harness the benefits of
renewable heat on sound economic basis. For example a biomass
boiler providing heat to a large farm and outbuildings at an
installed cost of £125,000 would receive a subsidy payment in
the region of £15,000 per annum.
"Until now it has been difficult for many in the rural community
to justify the expenditure for these technologies. Long payback
periods were not practical, especially in an industry where cash
flow and careful investment are paramount.
"Some technologies such as heat pumps and deep geothermal
require little or no input at all, and many farmers could grow
their own fuel for biomass boilers providing a huge opportunity.
The government's announcement will secure this as a progressive
form of energy production for the future and the rural
community".
The RHI will be introduced in two phases with the first phase to
be introduced in 2011. This will target industry, commerce, the
public sector, not-for-profit organisations and communities. The
second phase of the scheme will be implemented in 2012 and will
include the delivery of long term support for the domestic
sector.
The proposed tariffs detailed in the attached table have been
calculated to provide a return on the additional capital invested
of 12 per cent. RHI will be paid on the basis of multiplying the
metered renewable heat by the relevant tariff.
The tariffs have been set for the majority of technologies
however "tiered" tariffs have been introduced for small and
medium-scale biomass. Biomass installations will receive a higher
tier 1 tariff for the initial proportion of generation, reducing to
a lower tier 2 tariff when generation exceeds the "Tier Break".
Payments will be made to eligible technologies for a period of
20 years. Once in the scheme, the level of support will be
guaranteed, providing certainty to those investing in renewable
heat installations.
For further information on renewable heat technologies and the
Renewable Heat Incentive (RHI) Scheme, contact Rebecca Seaman on
01858 410200 email rebecca.seaman@fishergerman.co.uk.
For more information about Fisher German, please visit their
website here: www.fishergerman.co.uk