RHI incentives fall as farmers and landowners flock to cash in on CHP revenue
The announcement this week that the Renewable Heat Incentive (RHI) biogas tariff category has beaten targets by almost 90%, shows how attractive combined heat and power (CHP) systems are becoming to farmers, despite triggering a 10% degression in the incentive from April 2016.
The data released by the Department of Energy and Climate Change (DECC) show the rapid growth in popularity of biogas and CHP systems in recent months. The news is already driving more landowners and farmers to contact us to evaluate the technology as a new source of income and energy cost reduction on their farms.
The fact that the incentive target for 2016 was smashed by £8.8m, almost doubling it, clearly signals the take up rate of the technology is accelerating across the UK, and backs up what Earthmill is seeing on the ground at farms in the North of England and Wales.
The recent take-up of CHP is credited to advances in technology that have made commercial CHP systems increasingly practical, generating a return of 15%-20% per annum for some agricultural users of heat and power.
In the last six months we have started to work with more than 50 farmers and land owners in the North of England and Wales who are keen to install systems to generate power, heat and revenue.
The 10% reduction in the tariff which takes place from 1 April 2016 is triggering a rush for installations of the Finnish-made Volter (or Arbor ElectroGen) biomass CHP systems by farmers that had started the process and who were already close to installation and grid connection.
If you haven’t started working to investigate the returns or install a unit yet, it’s the best time to look at the technology now before the next degression in July, while the incentives are still very good, and the returns are attractive.