Renewable Heat with a 12% Rate of Return… Nice!

The UK Government has (finally) announced the details of the Renewable Heat Incentive (RHI) and it’s good news for businesses and organisations. Unlike Feed in Tariffs for renewable electricity, the RHI provides an income for generating heat from renewable sources (such as biomass boilers etc). The domestic sector will just have to wait until next year to benefit from the RHI, and there are no guarantees that the levels will be so generous.

A wide range of technologies and fuel sources are supported, including:

  • Ground-source heat pumps
  • Solar thermal
  • Biomass boilers

The tariffs (shown below) have apparently been calculated so are cost effective: not only bridging the gap between the cost of the new technology and traditional technology but also offering a rate of return of around 12% (6% for the more established solar thermal), so it sounds like a no-brainer if your business has the capital to invest. It also compares favourably with the 5-8% rate of return you get through the renewable electricity Feed in Tariffs.

It’s worth noting that if you already have renewable heat installations which were installed after July 2009, you are likely to be eligible for the RHI payments so it’s definitely worth a look.

These tariffs apparently offer a 12% rate of return...

Further information can be found here.

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