This is a cost comparison we have put together to show how wood fuel stacks up against various traditional fuels. As you can see, the Renewable Heat Incentive sweetens the deal significantly, but the reduced running cost alone makes the transition well worth while.
For instance, if you use 25,000 litres of oil to heat one 300’ x 80’ broiler shed then you will need 31,311 litres of propane gas, 71 tonnes of wood chip, or 52 tonnes of wood pellets.
You can buy logs and have them chipped, which currently results in a cost per tonne of £50/T or 5p/Kg. Bought-in chips are currently £80/T, and pellets are £260/T.
This is a return of around 30% and a payback term of just 40 months on the capital investment of switching to biomass.
In the above example, using wood chip, the grower saves £12,679 per year in fuel costs, and also earns £20,428 in Renewable Heat Incentive payments. The grower would be better off by a total of £33,106 per shed, per year. This incentive is government backed, index linked and guaranteed for twenty years. Once you sign up for the renewable heat incentive you keep your tariff, no matter what happens. If the government reduces the tariff as time goes by, which they are bound to do, as they did with the tariffs for solar energy, this only affects new applicants – it is not retrospective, so it cannot be applied to installations already registered to your name.