October 13, 2024 Green Heat and Energy Efficiency, Making the Switch to Greener Heating
Silvio Spiess on government incentives and green heat for Business
Silvio is the founder and CEO of Innasol, the UK’s market-leading distributor of biomass boilers. He is a leading and respected voice in UK renewable energy and sustainable heating. Through his vocal advocacy, he has influenced debate and legislation on renewable financial incentive programmes, and Government support for the transition to green heat.
We spoke to Silvio about green heat for businesses, the cost and approach to the transition away from fossil fuels, and what lessons the UK government can take from Austria and Germany
There’s very little government support in the UK for the transition to green heat. What are they doing differently in Germany and Austria?
Austria is the country with the highest market penetration for biomass. About 15% of the heat in Austria comes from biomass. So Austria has renewed its incentive for the replacement of a fossil fuel heating system. It’s quite open with regard to technologies you can use. For example, you can use biomass, you can use heat pumps, you can use solar thermal — it’s balanced and fair.
There is a non-repayable one-off grant for the cost of the project, which includes equipment and installation, and that funds up to 75%. If we take biomass as an example, you can get 75% up to €18,000 for a wood chip or pellet boiler, or up to €16,000 for a log boiler. This is a very attractive offer. Let’s say you have a €24,000 installation — you get €18,000 and you are only left with €6,000 to pay. Also if you are in the lowest third of income in Austria, you could be entitled to 100% funding.
In fact, as of the 1st of January this year, you are not permitted to install fossil fuel heating in a new building.
Now, Germany is the biggest biomass market in Europe, and the number one expert market for Austria. Germany’s subsidies are a little more complicated.
They fund up to 70% of a €30,000 project, so a maximum of €21,000. If it’s a particularly low-emission installation with extra filters, you can get an extra €2,500. So for a €30,000 installation, you could get a total of €23,500.
Also, if your income is under €40,000, there is a one-off non-repayable grant of between €11,500 and €23,500 depending on your income level and whether you put the extra filter on the system.
Obviously the schemes are much more generous in Austria and Germany than in the UK. Should the UK replicate those?
Yes of course. I suppose in Austria and Germany people are used to higher taxes and more incentives than people are in the UK, and perhaps that is a hurdle to overcome. But aside from climate change, there are other political and macroeconomic factors the government should consider. For example, does the UK want to be dependent on Russian gas?
Plus, support for net zero is a win-win-win. The individual or business gets a renewable heating system, you inject funds into local economies, and you don’t have to send money to Saudi Arabia or Russia.
What they shouldn’t replicate is the old RHI system, which was so incredibly complicated that the cost of the administration alone was so huge. They could have spent that money so much more effectively on one-off grants.
What advice would you give to businesses who want to make the switch to green heat?
Well, it’s the right thing to do, both environmentally and commercially. Of course, it would be better if the government offered some support, and the reality is transitioning to green heat does come with a high upfront cost, but you can save money on your fuel, you reduce your impact on the climate, and it can open a lot of business opportunities with other businesses who want ethical partners.
We published a Guide to Green Energy for Business, which will help businesses work out the financials of their energy transition. For example, you can deduct 100% of the capital expenditure on your renewable energy installation from your pre-tax profits, and there is a 0% rate of VAT on the installation of energy-saving materials until 31 March 2027.
We are always happy to discuss the options with businesses that are hoping to eliminate their dependence on fossil fuels, and I would encourage them to get in touch.
If your business is struggling to make sense of the regulatory environment, needs some strategic advice on switching to green power, or needs to understand the right renewable energy sources for you, call 01621 892613, and our nationwide network of fully trained and accredited renewable energy experts is can offer no-obligation guidance on your business’s Net Zero transition.
