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  • Conclusions

results

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Figure 1. Main result of the financial feasibility analysis. 

Using stated assumptions of future cost projections, the Soillse biomass - solar thermal district heating scheme presents a payback period of just over 4 years. Payback period however is a slightly false term commonly used in the sales pitch of renewable energy. For example, in this specific case study the payback period would be highly subjective to variation in potential payback methods i.e. here solar thermal panels were paid upfront with the assistance of the now defunct Renewable Heat Premium Payment (RHPP) subsidies, whilst the biomass system is repaid over a 20 year bank loan incorporating substantial interest payments. We must also therefore analyse the total projected saving over a 20 year forecast (typically assumed lifetimes of our relevant heating technologies). These present comparative savings to a reference LPG boiler of approximately £42,000 overall - a saving of £7,000 per household and £350 per annum on average. 

A breakdown of the two contributory heating technologies is presented in Figure 1 to provide a segregated analysis of biomass and solar thermal's independent financial feasibility. To state this in the conventional average unit cost (pence / kWh), the biomass fuel data supplied by a relevant technical contacts was supplemented by a projection of annual usable solar thermal gains equaling 496 kWh for a location in close proximity to Findhorn Ecovillage, using our developed tool for estimating solar thermal contributions (with some necessary approximations). 

The result of this segregated analysis is that for this case study solar thermal is projected to cost 30.1 p / kWh, while biomass only costs 7.5 p / kWh. This is despite the biomass system incurring substantial interest repayments equaling approximately 70% of the capital cost of installation. This prominent difference may be largely attributed to the ineligibility of solar thermal RHI payments where it was discussed previously that only solar thermal contributions to domestic hot water heating are eligible, and that when coalesced in a dual-input tank or store there is no way to distinguish between the two, and RHI payments are not granted.

sensitivity exercises

Sensitivity exercises were conducted to examine the impact of scaling the annual increase in maintenance cost from the default value quoted by technical contacts of 2.5%, and scaling the annual biomass fuel cost change in both positive and negative directions (having assumed zero change in the default results above due to the lack of quantitative justification). The results are presented in Figures 2 and 3 respectively. 
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                                                  Figure 2                                                                                                                      Figure 3
It is evident from Figures 2 and 3 that any sensitive change in either annual maintenance or biomass fuel cost will exert negligible influence on the qualitative financial feasibility conclusions drawn. Even with significant change due to sensitivity, these contributions to an overall cost evaluation are swamped in comparative consideration of loan repayment fees. 
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