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Could you earn a 65pc return from a wood-burning boiler

Invest £35,000 in a biomass boiler and get a guaranteed £57,645 in seven years
– with help from the Government. Does the claim stack up?

Could you earn a 65pc return from a wood-burning boiler

Invest £35,000 and get a guaranteed return of over £57,645 in just seven
years. It’s a very bold claim, but natural energy company Euroheat this week
said this is possible for households that switch to wood-fuelled heating,
and that’s before any savings on existing energy bills are factored in.

The Government’s Renewable Heat Incentive, which launched in April, pays
households that generate and use renewable energy to heat their buildings.
Payments are made quarterly for seven years and are based on the type and
amount of energy generated.

But can you really achieve a return of 65pc just by installing a wood burning
system? The short answer is probably not, but there are significant savings
to be made particularly if you currently use electricity or oil to heat your

What is the Renewable Heat Incentive?

As part of the Government’s aims to reduce greenhouse gas emissions and meet
targets for reducing climate change, it will pay households to produce
renewable energy. A wood burning, or biomass, system will achieve a tariff
of 12.2p per kilowatt hour of energy produced. Other renewable sources such
as solar thermal panels, air, ground and water-source heat pumps pay
different rates.

The scheme is open to homeowners, private landlords, social landlords and
self-builders, but not other new build homes. Anyone who has installed a
renewable energy source since 15 July 2009 can also apply.

What is a biomass boiler?

Put simply, it’s a device that burns wood to provide heating and hot water.
There are three main types of wood fuelled heating systems; a boiler than
provides heat and hot water for the whole house, a stand-alone stove that
provides heat to individual rooms and a stove with a back-boiler that heats
the room directly and provides hot water, and may also run radiators in the
rest of the house.

What are the fuel options?

There are three types of wood fuels – logs, pellets and chips.

Seasoned logs, which have been allowed to dry out over a couple of years, can
be used. This is a particularly cheap option if you have land and access to
free firewood on your property or have a cheap local supplier.

Pellets are made from the by-products of wood manufacturing. They are denser
and drier, so they burn more efficiently, and they require less storage
space that logs.

Chips generally come from forest or saw mills. They are more suitable for
heating larger areas so are usually only used for commercial premises or
community heating schemes.

Log-burning stoves and boilers are more work because they must be filled by
hand, while pellet and chip burners use automatic fuel feeders which refill
them at regular intervals.


Is it suitable for my home?

Brian Horne, of the Energy Savings Trust, said large homes in rural areas
without access to gas will benefit most from switching to wood fuelled

“These homes will usually get their heat from oil or electricity, which are
significantly more expensive,” he said. “If you have oil heating it is
easier and cheaper to switch because you will have radiators in place
already. If you’re using electricity you are likely to need to install

“Biomass boilers are quite big and heavy, so you will need space in an
outhouse, cellar or utility room. You must also have somewhere to store the
fuel, which is much cheaper to buy in bulk, and provide easy access for
deliveries which usually come in a lorry.”

Wood pellets ordered in batches of three or four tonnes at a time offer the
best value but require a storage space around half the size of a typical
garage. Most homes would need two or three deliveries of this size a year.

A small mid-terrace flat in the centre of London is unlikely to have the space
or easy access required to make a biomass boiler feasible, but such
properties generally use gas and the argument for switching is less

Mr Horne said: “It can be possible to save money if you live in a large
semi-detached, gas fuelled house in a city for example, but the savings
won’t be as high.”

Costs and savings

The Energy Savings Trust has calculated that for a typical four-bedroom
detached house, it will cost between £14,000 and £19,000 to install a
biomass boiler. The Renewable Heat Incentive will pay between £2,000 and
£3,500 a year for seven years, giving a total rebate of between £14,000 and

If the house is switching from electricity, there will be an additional saving
of £340-£650 a year in energy bills. That saving will be £335-£470 a year if
the property used oil and £25-£80 for gas. These savings take account of the
cost of buying fuel for a wood burner.

As with all heating systems, homes that are well insulated will see the most

So do Euroheat’s claims stack up?

Not unless you’re trying to heat a particularly run-down country manor.
Further digging revealed Euroheat’s claim was based on a 4,000 square-foot
house with poor insulation that consumes a whopping 67,500 kWh of energy for
heating and hot water per year.

This compares to a typical British home – around 820 square feet – which uses
15,200 kWh for heating and hot water annually.

The Government has developed an online tool to help you calculate how much you
might save through the Renewable Heat Incentive scheme. Find it at

How to choose a wood-fuelled heating system

The Energy Saving Trust has put together a buyers’ guide to biomass boilers.
Some things to consider are:

Boiler or stove?

Boilers can be used in place of a standard gas or oil boiler to heat radiators
for a whole house, and to heat the hot water. Stoves are used to heat a
single room, usually in conjunction with other heating systems, but may also
have a back boiler to provide hot water.

Chips, pellets or logs?

Chips are not suitable for heating a single house, but can be used to heat
larger buildings or groups of houses. Pellets are much easier to use and
much more controllable than logs; pellet boilers can run automatically in
much the same way that gas or oil boilers operate. Logs require considerably
more work, and you will need a lot of logs to heat a whole house, but they
can be cheaper than pellets if you have a good local supply.

Do you have a local fuel supplier?

Some companies now offer deliveries of pellets anywhere in mainland Britain
and Northern Ireland; supply of logs is much more variable.

Do you have space?

Wood boilers are larger than gas or oil equivalents. You will also need space
to store the fuel – somewhere that’s handy for deliveries but also
appropriate for feeding the boiler.

Do you have somewhere to put the flue?

You will need a flue which meets the regulations for wood-burning appliances
such as a new insulated stainless steel flue pipe or an existing chimney.
Chimneys normally need lining to make them safe and legal.

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