The Hill of Banchory scheme in Aberdeenshire is one of 16 projects to share in more than one million pounds of awards under the Scottish Biomass Heat Scheme.
The news comes as the Scottish Government published a plan to drive further growth in renewable heating.
The Renewable Heat Action Plan will help Scotland meet its target of 11% of heat coming from renewable sources by 2020, against current production of just 1.4%.
Energy Minister Jim Mather said: "Heating accounts for half of our energy use. Therefore, alongside better energy efficiency, it is important that we build a diverse renewable heat market across Scotland to significantly reduce our emissions.
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"Focusing on biomass, on an industrial and commercial scale, will make the biggest impact on emissions reductions in the medium term. In urban areas there are tremendous opportunities for district heating schemes, while in rural areas off the gas grid, individual solutions such as biomass or heat pumps will be particularly important.
"The Biomass Heat Scheme is already helping business reduce emissions and potentially save money, while supporting jobs in forestry and the supply chains. There are huge areas for further growth, particularly in terms of the manufacture, installation and maintenance of renewable heating systems.
"The Action Plan sets out the ways we can work with partners to achieve a comprehensive delivery infrastructure and a supportive policy and regulatory framework to move towards a low carbon Scotland."
The Sustainable Development Commission Scotland delivered the background statistics for the Renewable Heat Action Plan, identifying Scotland's renewable heat potential.
(CD/BMcC)
