Wood Chip v Wood Pellet
There are economies of scale when it comes to the choice between the two fuels, as generally large consumers of heat can use wood chips because the scale of installation/cost needed to accommodate a wood chip delivery is justified by the heating demand(kwh per year), whereas a small heating user (5 bed detached house) will not want to incur the larger capital cost of the installation for a lower long term fuel price because they will never recover the additional cost to build such a system due to their low usage.
Facts and figures
Â£190 per tonne of pellet / 4800 kwh per tonne = 3.9 pence per kwh and Â£90 per tonne of wood chip / 3500kwh per tonne = 2.6 pence per kwh.
So from theÂ equationÂ above we can surmise that there is a difference in Kwh between wood chip and pellet of 1.3 pence per kwh, then base this rate against a domestic tariff of 7 years and a heating demand of 40,000 kwh per year (4 bed detached)Â this equates to Â£4760 over the term of the RHI.
Now using the above figure of 1.3 pence per Kwh on the commercial tariff of 20 years and a heating demand of 700,000 kwh per year it equates to Â£182,000 over the term of the RHI which is more than enough to cover the additional outlay for bulk handling of wood chip v pellet.