A leading UK energy efficiency specialist is warning the UK’s education sector to look before it leaps when it comes to the rising trend for targeting schools, universities and colleges with offers of free biomass boilers.
Adrian Wright, CEO of Happy Energy, says that investors who have spotted an opportunity to benefit from generous payback rates offered through the commercial renewable heat incentive (RHI) are increasingly targeting the education sector with offers of free fully installed and maintained biomass boilers.
The highly energy efficient units – which burn wood or wood pellets to create heat and hot water – qualify for payments under the government’s RHI and are particularly suited to large energy users such as schools, colleges and universities.
But Adrian is warning senior managers in the sector to “look before they leap” when it comes to the range of benefits offered by biomass, advising that it could pay to ask a number of questions before signing up.
“Whilst on the surface the offer of a free biomass boiler installed and maintained looks really appealing,” he says, “schools, colleges and universities are being targeted by these investors because of the generous returns offered by the RHI and by taking up the free offers they could miss out on receiving these payments themselves.
“As an example, a 200 Kw wood chip boiler, fully installed including ground works and dedicated cabin, will cost around £150,000. If used for around 3,000 hours a year, it would generate a RHI income of just under £30,000 in year one, with the potential to generate over £700,000 over 20 years and a likely profit of around £500,000 in that time.
“Whilst a free biomass boiler will reduce energy bills for those not on mains gas, businesses would miss out on receiving the payments themselves. From a business perspective, why would you want to miss out on these financial and environmental benefits – especially as there is funding and off-balance sheet loans available to fund biomass investment?”
According to Adrian, questions to ask include:
Will the wood pellet or wood chip fuel be cheaper or more expensive than your current fuel supply? Mains gas is usually cheaper than biomass fuel so your energy bills could actually increase. The biomass supplier may use a bit of smoke and mirrors to make it look as though the biomass is cheaper by quoting improved boiler efficiencies.
Can you afford to install the boiler yourself? Investors are not offering a free boiler out of the goodness of their hearts, they are looking for safe returns of 15 percent and higher. If you can afford to buy the boiler, do – it’s a great investment.
What minimum use will be required on the free boiler and what happens if that isn’t achieved? Most contracts linked to a free biomass installation will require you to generate a minimum amount of heat a year. There is likely to be a penalty attached if you don’t use the boiler or don’t achieve the minimum usage.
Are there other ways to cut energy bills? Typically someone providing you with a free biomass boiler will not want you to save energy – in fact, they want you to burn as much as possible – so consider other ways of cutting energy usage such as insulation and solar PV.
“Biomass boilers provide a wide range of benefits for those in the education sector, but caution and research are advised before taking up one of the growing number of free offers,” adds Adrian.
Happy Energy T: 0800 0246 234 W: www.happyenergy.co.uk