The new £860m Renewable Heat Incentive (RHI) could be worth thousands of pounds a year to wood-processing companies installing wood-burning boilers.

The scheme, the world’s first, goes live in July and will pay companies 7.6p per kW/hr of heat produced with renewable energy equipment up to a threshold, when payments reduce to 1.9p per kW/hr. Installations over 200kW but less than 1,000kW will receive 4.7p per kW/hr payments, falling to 1.9p. Payments continue for 20 years and companies that have already installed equipment (back to July 2009) are also eligible.

In addition, the Carbon Trust’s successful renewable energy project loan scheme is to continue, albeit the ‘interest-free’ element has been ditched in a new £550m partnership with Siemens Financial Services.

The new scheme has greater flexibility on the amount financed, though average SME loans are expected to be about £30,000. Average terms vary from one to seven years.