OFTEC is warning that the government's Renewable Heat Incentive (RHI) and Green Deal policies will mean rural homeowners will have no incentives to go green.

At the moment the RHI looks set to exclude bio-liquids, which OFTEC believes would provide an easy way for oil users to lower their carbon emissions. Instead, the off-gas-mains sector would be pushed towards using renewable technologies with high capital costs, with little or no payback for the end user.

Jeremy Hawksley, director general for OFTEC, said: "the true cost of going green for rural homeowners will effectively encourage them to do nothing to make carbon savings. This is because technologies which are included in the RHI will still be more expensive than converting existing oil systems to run on bio-liquid blends, and in many cases cause severe disruption for homeowners."

The Energy Saving Trust's (EST) online ‘home energy selector' provides recommendations on renewable technologies. Taking a typical example of a pre-1900 three-bedroom cottage in East Anglia, which is already using oil for heating and hot water, the EST’s results were surprising in terms of cost and carbon savings.

If the existing oil-fired boiler was replaced with a biomass boiler then fuel bills would actually rise by £430 per year. Ground source and air source heat pumps did not fare much better – it would take between 31 and 200 years for any energy savings to make the installation costs worthwhile for the customer.

In terms of carbon savings the biomass boiler came out best, but at an increased running cost to the consumer. Users who switched from oil to an air source heat pump would actually be increasing their carbon emissions. The ground source heat pump probably represented the ‘least worst' option, with potential CO2 savings of 1,150kg per annum.

In contrast, OFTEC has calculated that existing oil users who want to switch to a more renewable energy source could reduce their carbon emissions by around 1,643kg per annum by switching to a bioliquid blend. Existing oil heating systems can be converted to run on bioliquids at low cost with very few modifications.

OFTEC believes that if this blend is included in the RHI, 90% of existing oil customers could transfer to use it by 2020, resulting in considerable carbon savings. Boilers have a natural lifespan of between 15 and 20 years and, with many oil boilers being replaced every year, OFTEC believes many consumers will switch to a bioliquid condensing boiler if it is included in the RHI.