Are you eligible for the 20-year RHI payments?
The 20-year Renewable Heat Incentive (RHI) payments for biomass can make or break the financial case for installing a new system. RHIs are not available for domestic household biomass. There must be some business or community element.
In addition, it depends on what the heat is going to be used for. On 29 January 2018, the UK Government issued new guidelines on eligible heat use.
The specified eligible uses are:
- heating a space, heating water, carrying out a process within a building, or
- carrying out commercial cleaning or drying processes outside of a building
- excluding some activities, which are listed below
Ofgem can enquire as to whether the heat use has been manufactured with the sole intent of maximising RHI payments.
Examples of allowable use
We’ll look at some of the non-allowable uses in a minute but, first, here are some typical examples of eligible uses:
- Care homes
- Holiday cottages
- Farms: crop drying or heating water or buildings
- Municipal swimming pools
Though you cannot claim RHIs on heating your house, what happens if you install a biomass system that heats some holiday cottages (or other business premises) in addition to your home? Where more than 50% of the heat is used for your home, as opposed to the business, you cannot claim RHIs on any of the heat generated.
However, where biomass is used to heat two or more homes (a district heating system) with more than one council tax banding, you can apply for RHIs.
Heating swimming pools
To be eligible, the swimming pool must be enclosed, and must have a municipal or commercial use, for example, hotels, schools, leisure centres, holiday lets or other tourist venues. So, if you have a private swimming pool, you cannot claim RHIs on the heating of your pool, even if it forms part of a district heating system on which you do claim RHIs – for example, buildings used as holiday lets.
You can get RHIs for drying wood, only where you’ve already been using fossil fuels for the same job – and the use of fossil fuels was commercially viable. You can no longer use RHIs to turn unviable wood drying into a profitable wood drying. There are transitional arrangements, which may allow wood-fuel drying plants, in development in 2018, to claim RHIs.
You cannot get RHIs for drying, cleaning or processing waste. This is to stop people claiming RHIs on heat used to reduce the weight – and the cost – of waste going to landfill sites.
Drying crops, animal bedding and animal feed
The government did consider restricting RHIs on these activities but decided to allow the drying of other, non-woody, biomass as an eligible heat use.
Again, the government considered restricting RHIs, but decided to continue to allow RHI claims.
What we do
We’ve been designing and installing biomass systems since 2008 and our team has been involved in more than 1,000 biomass projects.
We also provide wood pellet and wood chip fuel to hundreds of customers in England and Wales.
Finally, we own several biomass boilers ourselves, which we use in our own business.
RHI questions? — How to get in touch
If you would like to talk to us about RHIs, a new biomass installation, or repairs and maintenance issues, or if you are interested in purchasing wood chip or wood pellets, please give us a call or complete the enquiry form below.
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