By Silvio Spiess is Founder and CEO of renewable heating ‘super power’ Innasol Group
Having joined the renewable energy party relatively late in comparison to its European cousins, the UK renewable heating sector has since found its niche as a reliable and affordable source of energy for business owners and homeowners alike. This is not least thanks to the Government’s Renewable Heat Incentive scheme (RHI) – an attempt at pushing the UK towards its 2020 European carbon targets. But renewable heat remains something of a white-hot secret.
What is the RHI?
The Renewable Heat Incentive scheme (RHI) offers financial incentives to encourage business owners to switch over to environmentally and financially friendly renewable heating solutions. Under the scheme, participants install a renewable heating system and in return will receive quarterly payments from Ofgem which are proportional to output.
There are two branches to the RHI: commercial and domestic. The commercial scheme was introduced in November 2011 and unsurprisingly, immediately found traction in the market. The domestic scheme was launched in April 2014.
Since 2011, more than 13,000 businesses have applied for the commercial RHI. Over 9,000 applications have been approved, more than 2,500 others are in progress and a further 1,500 are with the applicant (Ofgem).
These figures demonstrate that the Government believes in renewable heating as a low-carbon technology that can edge us closer to our goals. But does it mean that it will work for businesses in the long run?
In short– yes, it will.
As is shown in the Renewable Heat Report, heating has been shown to contribute 55% of the average business’s energy consumption. This immediately makes it the key target for companies which want to reduce their energy and carbon overheads.
Rather than these financially savvy, high impact solutions, we hear instead of businesses introducing smaller scale changes, perhaps upgrading window glazing or increasing loft insulation. Whilst these are a step in the right direction, it must be said that businesses should not expect to yield the same dramatic financial savings or reduction in carbon footprint.
To see real results, it’s really important to get right to the root of the issue, which is the energy source itself.
What are the benefits?
The benefits that businesses experience after swapping their fossil fuel boiler out for a biomass boiler or heat pump often need to be seen to be believed.
Firstly, and probably of most interest to businesses watching their income and outgoings, is the sheer amount of money that can be saved on energy bills. Switching over to greener biomass or heat pumps bring reductions of almost 45%. This isn’t wishful thinking, just fact.
Heating represents a huge 55% of average commercial energy consumption, so changing how you heat your water and your premises can have really positive implications. Furthermore, saving 45% on heating costs comes at no compromise – ease and reliability are guaranteed through the automated, remote controlled system.
Next is the positive environmental impact. Heating is responsible for 38% of the UK’s carbon dioxide emissions and 32% of the UK’s greenhouse gas emissions, making it worse than agriculture and industrial process. So, changing over to a carbon neutral biomass system (where wood fuel is sustainably sourced) doesn’t just reduce of even halve your business’s carbon footprint. It eliminates it entirely.
Along with reduced bills and no carbon footprint comes energy independence. Although low at the moment, oil and gas prices are subject to political volatility which often result in unpredictable price hikes for consumers. 99% of the time these increases are in the hands of the Big Six energy suppliers, leaving home and business owners somewhat held at ransom, confused and out of pocket. Being part of a cleaner, greener movement means that energy dependence is a thing of the past. Fuel is sourced locally and sustainably, meaning that its price stays steady (as has been the case for the past decade).
Perhaps most importantly, replacing your company’s fossil fuel boiler with a renewable heating technology makes the business eligible for the government’s Renewable Heat Incentive scheme. This means that not only is your business saving money through reduced energy bills, it is actually making money through the government’s financial incentives, which are paid through Ofgem depending on heating output. The RHI simply requires a completed application and the installation of one of a list of preapproved technologies, simple as that.
How to get started?
The RHI is an initiative between the Department of Energy & Climate Change and Ofgem, and there is a wealth of information on both websites regarding eligibility, how to apply and the application process. The Energy Saving Trust site also provides objective and informative content for those looking for further information and downloads.
All buildings are different, and what might suit one urban business may not be a great solution for a larger rural company with a lot of outdoor space. Whichever technology you choose, applying for the commercial RHI is simple and can be done through Ofgem. Get there quickly though, the commercial RHI tariff rate, which is the amount of money that Ofgem pays per kilowatt hour (kWh) of heat generated, reduces depending on uptake.
Renewable heating may be little known compared to the more mainstream renewable energies such as solar and wind energy, but it is gathering momentum quickly thanks to the significant savings that it offers without compromising on quality or convenience. It is not an opportunity to be missed by British businesses.
Greener, cleaner and cheaper: a win-win-win.