Considerations for a Biomass Boiler Installation

How much does a biomass boiler system cost?

An automatically fed pellet boiler for the average home will cost between £14,000 and £19,000 including installation, flue, fuel store and VAT at 5%. A log boiler on average will cost between £11,000 and £23,000 and an individual pellet stove abound £4,000 – £4,500. Fuel costs may vary dramatically but will generally cost less per kilo depending on the size of the order. So the larger fuel store you have, generally the more you will save over time. A website set up to help biomass system owners find fuel suppliers in their area can be found Big Barn.

Biomass boilers are not cheap and can cost up to three or four times more than a standard fossil fuel boiler. Nonetheless, the total cost of biomass systems varies between types, manufacturers and installers. The table below gives you a rough idea of the costs of buying and installing a biomass boiler system, including parts (boiler, buffer tank, flue) and installation, as well as VAT at 5%.


These costs are for small and medium scale biomass systems for homes and businesses. For example, a standard 3-bedroom home’s energy requirements would be fulfilled by a 15kW system.

Installation costs of larger biomass systems vary massively and can be comparatively much higher than those of smaller systems, especially considering many such systems require some degree of building work. The Carbon Trust website has a number of case studies which detail the total cost for renewable energy installations in a range of organisations. A school in Scotland, for example, installed a 400kW biomass heating system which came to a total cost of around £624,000 (of which £112,000 was spent on the boiler itself).

For more information on this and other projects, click Carbon Trust.

Other Funding Sources for Biomass Boilers

Apart from the RHI payments and the RHPP, there are several other sources of funding available to homeowners, businesses, and organisations looking to install biomass systems.

The Rural Development Programme (RDP) is a major funding source provided by the European Union which supports projects seeking to improve rural life through environmentally friendly ways of living. The RDP is potentially available to farmers, rural business owners, those managing land or woodland and those living in a rural community wishing to install renewable energy technology.

The RDP is administered differently in each part of the UK:

The RDP is administered in England by the Department for Environment, Food and Rural Affairs (DEFRA).

For Scotland, see the Scottish Government’s website.

In Wales, the RDP is administered by the Welsh Assembly Government.

For information on the RDP in Northern Ireland, see here.

The Community Sustainable Energy Programme offers information and funding for feasibility studies for community and district energy projects.

The Forestry Commission offers a Forestry Micro-enterprise Grant of £2,500-£25,000 for eligible small companies (fewer than 10 employees) wishing to install a biomass system. For more information on this grant, see here.

The Carbon Trust’s website also has some useful information on funding sources (including loans, grants and subsidies) for businesses, organisations and communities

A large list of financial schemes and initiatives can be found HERE at the Biomass Energy Centre.
For convenience, grants and support are divided into those that help support the purchase, installation or development of equipment, those that support the fuels supply chain, and those that provide consultancy and advice.

Finance Options for Biomass Boilers

There are a number of companies offering finance for biomass boilers in the United Kingdom. Finance, in the form of loans and leasing agreements, is available for domestic, commercial and industrial installations, in both the private and public sectors. Finance for renewable energy technologies allows customers to avoid large upfront costs and make payments out of the income earned from government schemes such as the Renewable Heat Incentive, as well as energy bill savings.

Finance may be offered on a range of bases, each offering varying levels of financial risk and reward, as well as varying interest rates. Typically the finance company will provide the renewable heat technology and its installation in return for payments spread over a period of time. Depending on the type of agreement, the client may either come to own the technology at the end of the period, it may be sold by the company with the proceeds being split between client and company, or the finance company could retain it.

The arrangements offered by finance companies will vary, however, and each will offer different advice. It is therefore advisable to obtain quotes and agreement terms from a range of companies, based on your energy/heating needs and financial situation.

Please visit our Approved Finance Providers section for a WoREA approved selection of UK lenders offering finance for biomass systems.