Biomass heating & RHI

Biomass pellets

Biomass heating systems also known as Wood-fuelled heating systems, burn wood pellets, chips or logs to to provide warmth in a single room or to power central heating and hot water boiler.


Wood Pellets

The UK Government is currently establishing the Renewable Heat Incentive (RHI).  The Renewable Heat Incentive (RHI) is the Government’s principal mechanism for driving forward the transition to deployment of renewable and low carbon heat over the coming decades. The RHI is a key contributor in achieving the UK’s share of the EU’s renewable energy targets.

The RHI is a relatively generous incentive which pays you money for every kilowatt hour of energy you produce.  The RHI applies to biomass heating, ground source heat pumps, solar thermal systems, biomethane injection and biogas combustion.

The RHI is currently only available for Commercial property and came into effect in April 2011 although can be backdated to renewable heat systems installed since July 2009.  Energy produced doe need to be metered to claim the full RHI tariff.

The Renewable Heat Incentive is also available for domestic properties.

We have done come calculations and we can confirm that a small biomass system in a commercial property will currently pay you around £4.75 for every 15 Kg bag of wood pellets you burn. One 15 kg bag of wood pellets costs from around £3.65 incl vat and delivery which means the RHI will pay all you fuel costs and contribute around £1-1.50 towards the cost of your biomass boiler for every bag burnt. A commercial property can completely pay off the biomass boiler purchase and installation cost within 4-5 years using the renewable heat incentive. RHI incentives are paid for 20 years for eligible technologies

The Renewable Heat Premium Payment (RHPP)

Increasing the grant levels will come as a welcome boost to the renewable heating industry following the disappointment of continued delays to the domestic RHI. The Department of Energy and Climate Change (DECC) has bowed to strong calls from within industry to make the RHPP more generous in order to support the market as a stopgap until the RHI takes over next summer.

Also announced is a new rule that all future recipients of the RHPP must undergo a Green Deal assessment to qualify – a process which will typically cost homeowners £100-£150. Therefore, payments for ground source heat pumps will nearly double from £1,250 to £2,300 whilst those who install air source heat pumps will now receive £1,300, up from £850. Biomass support has increased from £950 t0 £2,000 and solar thermal £300 to £600.

If you have any questions about whether you can apply, you can call the Energy Saving Trust on the numbers below:  

  • in England, Northern Ireland and Wales: 0300 123 1234
  • in Scotland: 0800 512 012.

Up to date information from the govenment website should be obtained from

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