Renewable Heat Premium Payment Scheme – time is running out
With Christmas just around the corner and temperatures already plummeting towards zero, homeowners will soon find themselves, if not already, turning up the heating to keep warm. However, wood burning stove manufacturer Chesney’s claim that using a wood burning stove could save the average household £300 a year – supposedly means more money in the bank for Christmas presents and Turkey for those of you who take up the idea.Â
Bear in mind that this bold claim covers the burning of wood pellets rather than logs and uses the calculation that burning wood pellets will cost 4p per kilowatt hour, as opposed to the 6p per kilowatt hour it would cost to use gas.Â
Chesney’s have calculated that the average household gas consumption is 16,500kWh, which based on the 6p per kWh would cost £990. They then calculated the cost of generating the same heat using wood pellets, which would be £660.Â
However, the claim seems to have its flaws. Firstly, Ofgem have reduced their estimates of how much energy the average domestic consumer uses, meaning that the average annual gas consumption is now 15,300kWh. If Chesney’s were to use this figure, the savings would be considerably less. Secondly, comparison site Uswitch.com puts the average cost of gas at 5p per kWh (not 6p) further reducing the savings.Â
Furthermore, figures from the Energy Saving Trust previously estimated that switching from gas heating to wood fuel would save on average around £100 a year, with Brian Horne stating  “Gas-heating and wood-heating costs are similar.†This point is proven further by Ofgems’ latest estimate for the average annual customer gas bill of £755. This figure highlights that the amount saved by burning wood fuel would be only £95 not £300.Â
All that being said, there are 3.6 million households in Britain that are not connected to the gas grid which could benefit hugely by switching to wood-fuelled heating systems. The Renewable Heat Premium Payment scheme (RHPP) offers households the chance to apply for a £2000 grant that will enable them to install a biomass boiler, which in turn will allow them to apply to the Renewable Heat Incentive (RHI). This scheme will then pay households for the renewable heat which they produce.Â
The scheme, which is not solely aimed at households off the gas grid, is not limited to Biomass boilers. It will also aid households that have installed or wish to install air-source heat pumps, ground source heat pumps and solar thermal technologies. It has been estimated by the Energy Saving Trust that installing a Biomass boiler could earn a household around £1,600 a year for seven years, when the scheme in its present form will then come to an end.Â
The RHPP, which is currently in its second phase due to the high interest in Phase 1, is according to sources, only available until March 2014, after which the RHI will launch. So if you have had a Biomass boiler or any of the other listed systems installed after July 15th 2009, you do not have long left to make use of the existing grant system.Â
The benefits of a wood burning stove are not purely economic, it should be remembered that switching to a wood burning stove will also reduce a household’s carbon dioxide emissions although the extent will vary depending on which fuel is being replaced. By replacing gas with a wood burner, the Energy Saving Trust estimates that a 3 bed, semi detached house, with basic insulation would save 3.1 tonnes of carbon dioxide a year.Â
Back to the economics though, a wood pellet stove would typically cost around £4,300 to install, assuming that the property has a functioning chimney and that it has been properly cleaned and lined. Assuming the savings made after switching to the wood burning stove are £300 (as claimed by Chesney’s), it is estimated that there will be a 6.9% yield as well as the benefits of warmth, aesthetics and eco savings; which is all without taking advantage of the RHI scheme. An investment with just over a 14 year pay back period.Â
The debate therefore goes on, for some a wood burning stove may seem the most appropriate and cheapest option but for many, who cannot afford to supply and store the wood (which in itself can be costly), sticking to gas may be more sensible. A poll conducted by the Telegraph also highlighted that out of 1,600 readers, only 45% believe that a wood burner would save money and many admitted they would only have one for aesthetic reasons or to enable access for Father Christmas.Â
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If you would like more information about the Renewable Heat Premium Payment (RHPP) or the Renewable Heat Incentive (RHI) or would like to find out if you are eligible to apply, we suggest that you visit www.energysavingtrust.org.uk.
If you have a problem with a stove that has already been installed, perhaps poorly, do not hesitate to contact your local building surveyor:
SJ / BT / LCB Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 09/12/2013