Cost of Biomass Boilers
Biomass Boilers are a hot topic in the UK, as the Government's 2020 target of generating 15% of all power from sustainable fuels comes closer.
There are Government schemes which offer financial incentives to those who purchase them and publicity about the huge savings they will make to your energy bill.
However, while many businesses and households are choosing to become more environmentally friendly, recent figures suggest wood burning biomass boilers account for a tiny 0.5% of all boiler sales nationwide, despite their green credentials.
It seems that although there are good intentions to become green, the huge costs associated with renewable energy systems are too off-putting.
How Much Do Systems Cost?
It costs about £12,000 to install an automatic biomass boiler in a domestic residence, about ten times that of a more conventional gas or oil boiler system, so perhaps it is not surprising they account for such a small percentage of boiler sales.
Manual biomass boilers, where the wood is fed into the furnace by hand, are cheaper at about £7,000. But biomass boilers intended for commercial and business use are even more costly. A large hospital would need to spend a staggering £400,000 to provide adequate year round heating and hot water using a biomass boiler.
On top of the cost of the equipment and installation, fuel costs themselves need to be taken into consideration. Wood pellets derived from waste wood materials are the most suitable fuel for biomass boilers and typically cost between £150 and £200 per tonne.
With the average household requiring approximately 11 tonnes of wood pellets per year, a domestic-use biomass boiler will typically cost an estimated £15,000 during its first year.
For commercial businesses, public organisations and non-profit charities, the Renewable Heat Incentive (RHI) can help with the large costs associated with becoming more environmentally friendly. As private and public organisations contribute 38% of carbon emissions in the UK, this Government funded cash incentive was put into place in 2011 to provide support and encourage businesses to do their part for the planet.
Under the scheme, business can claim payments from the Government for 20 years and can expect approximately a 12% return per annum.
This funding has not yet been rolled out to the domestic sector, but the Climate Change Minister recently announced plans to introduce the scheme this year (2013). However, homeowners who currently rely on non-gas fuels who are interested in installing a domestic biomass boiler can claim a Renewable Heat Premium Payment (RHPP), a Government issued voucher to the value of £950 to help towards the costs.
Once the domestic RHI scheme is launched, homeowners who have installed a biomass boiler using an RHPP voucher will still be eligible to apply for RHI payments.
Do Savings Outweigh Initial Costs?
Using sustainable fuels to generate power can drastically reduce electricity bills, although the benefits may not be seen for some years. Large organisations using heat and hot water constantly throughout the year could see around 2,500 tonnes of carbon emissions offset, and a £60,000 bill saving per year. Privates residences could see an offset of around eight tonnes of carbon dioxide and a £200 per year saving.
Based on these figures, it could be around six or seven years before the systems start to pay for themselves.