Have you been offered a free biomass installation at your home? Does the offer sound too good to turn down?

free biomass - a burning biomass boiler

Ofgem, regulators of the gas and electricity markets in the UK, has suggested consumers advance with caution while third party-onwership of biomass boilers remains a grey area.

The Renewable Heat Incentive, or RHI for short, is a government-led scheme set up to incentivise commercial and domestic installations of renewable heat technologies, such as biomass and solar thermal energy. The scheme works by making quarterly payments to the home or business owner for the renewable heat energy they produce over a period of approximately 20 years. The idea being that these payments, along with biomasses cost-effectiveness over traditional energy sources, would encourage more people to turn to renewable energy.

When the scheme was put into action, business and home owners were not the only ones to see potential. Certain renewable energy installers realised that they could make long-term financial gain by funding biomass installations in exchange for the RHI payments, which over a period of 20 years would be rather substantial, in effect leading to the expression free biomass. In effect, these companies would be third-party owners of the technology.

So, the home or business owner gets lowered heating prices and the company profits from the RHI payments. Everybody wins right?

Well, not exactly. The interests of the renewables provider and the home or business owner often varies, and protective action should be taken to ensure you’re not left in the red.

Ofgem has written some words of advice to those considering funding their systems in this manor to avoid any potential hiccups in the future.

1. Seek legal advice.

The likelihood is you’ll be entering into a financial agreement. Taking legal advice will ensure you understand the small print and exactly what you’re signing up for. Is this an acting loan or simply a hire purchase? What are the repayment rates and regulations? Are you entitled to a cancellation period?

2. Inform the relevant authorities.

Having such a system installed might require you to inform your mortgage provider, to obtain local planning permissions and could void any home or business insurance you have. Not all companies will do this as part of the installation process and ticking these boxes prevents any unexpected shocks arising.

3. Ask the right questions.

Ofgem has kindly provided you, and us, with a list of questions you need to ask yourselves and your potential green energy installer prior to giving your free biomass boiler the green light.

Follow this link to Ofgem’s website where you can view these questions and better protect your property from anyone looking to exploit you through the use of renewable energy.

While the Department of Energy and Climate Change (DECC) figure out and finalise their regulation of third-party biomass ownership, we advise you follow the above steps to best protect yourself from ending up out-of-pocket or with a system unable to cater for your heating needs. Nobody likes cold winters.

If you are interested in a biomass installation, find out how GreenGenUK can help fund your system by filling out the enquiry form found below.