Everything you need to know about air source heat pump grants
You may have heard that there are air source heat pump grants available to make it easier to switch to renewable energy. The current system is about to change – this post will help you understand what’s happening and how you can get help with installing your air source heating.
The Government has plans to decarbonise the country through the Heat and Buildings Strategy, and for a while now has been offering home owners incentives to move to renewable heating.
The current air source heat pump grants system
The current system in place to help with installing renewable energy is called the Renewable Heat Incentive (RHI). It will be coming to an end 31st March 2022, but applications can still be accepted and approved right up to the cut off date.
What is the Renewable Heat Incentive?
The RHI was introduced in 2014 as an incentive for home owners to switch to renewable heating systems, such as ground source or air source heat pumps. Biomass systems can be accepted in certain circumstances.
It has been only moderately successful, with around 22% of the 500,000 homes that the Department of Business, Enterprise and Industrial Strategy (BEIS) predicted would have been converted by 2020. This lack of uptake could explain why the scheme is being phased out.
How does the RHI work?
The grant is actually very beneficial to those who took it up. It was intended cover the difference in costs between installing renewable energy rather than traditional fossil fuel heating systems.
Rather than an up front payment the scheme works by giving the home owner quarterly payments over a period of seven years. The payments are worked out in accordance with the efficiency of the system being installed and the heating requirements of the property.
In most cases, the grant does a good job of recouping the initial expenditure over the seven year period.
Who is eligible for the Grant?
The Renewable Heat Incentive is available for any domestic property upgrading from fossil fuels to renewable energy – this is called the Domestic RHI. There is also a non-domestic RHI scheme for public sector and non profit organisations.
How do I apply for the RHI?
To apply for the RHI you must have an energy performance certificate issued by an installer registered with the Microgeneration Certification Scheme (MCS). When you have your Energy Performance Certificate, you can apply for the RHI through the Ofgem website here. [https://www.ofgem.gov.uk/] Applications must be completed by the home owner.
What renewable energy sources are covered by the grant?
The RHI includes the following renewable energy technologies:
- Air source heat pumps {link}
- Ground source heat pumps
- Biomass boilers (including wood pellets, wood chips and logs)
- Solar thermal panels
Again, the installation must be registered with the the MCS to be eligible for payments. Additional payments could also be made if an approved Metering and Monitoring Service Package (MMSP) is also installed currently this is an extra £57 per quarter. However it is not mandatory to have a meter installed unless there is a secondary heating system.
What are the RHI Tariffs?
The domestic RHI tariffs are currently:
- Biomass – 6.97p/kWh
- Air source heat pump – 10.85p/kWh (capped at 20000kWh per year)
- Ground source heat pump – 21.16p/kWh (capped at 30000kWh per year)
- Heat pump MMSP – £57 per quarter
- Solar thermal – 21.36p/kWh
Systems that do not have a meter installed are fixed for the 7 year period and are adjusted in accordance with the Consumer Price Index (CPI).
So how much will I get paid by the RHI?
Remember this scheme is designed to offset the cost of installing renewable energy against the cost of installing traditional fossil fuel heating systems. It makes the systems affordable – you will not make money from the RHI, but you will find that your heating bills are pretty much covered and your initial additional outlay will be recouped at the end of the seven years.
Here’s how it works:
You have an air source heat pump and your home uses 20000kWh per year
- 20000kWh x 10.85p/kWh = £2,170 per year
- £2170 x 7 = £15,190
If your home uses more than the allowed 20000kWh then you will have to pay the difference. Air Source Heat Pumps aim to be 400% efficient – they put out 4 units of heat for every unit of electricity they use, so you should end up with a much reduced energy bill, and your initial additional installation cost is covered.
Getting the best out of the RHI
To get the most out of the RHI (and your renewable energy system) you must be as efficient as possible. If your insulation is good (hence the need for the Energy Performance Certificate) then you will need a smaller plant because you will use less heat units. Therefore you won’t exceed the usage caps and have additional electricity bills to pay.
You could also consider installing solar power to run your Air Source Heat Pump – then you will be even if you do go over the cap, you won’t have to worry about another bill to pay.
The Boiler Upgrade Scheme
When the RHI ends on 31st March 2022 it will be replaced by the Boiler Upgrade Scheme.
Formerly called the Clean Heat Grant, the aim of the scheme is to specifically help small domestic properties move from fossil fuel powered heating to renewable energy. It’s the Governments ambition to install 600,000 heat pumps by 2028. To help them achieve this ambitious figure they have put aside £450 million over the next 3 years to give to home owners installing ground source and air source heat pumps.
£5000 to upgrade your boiler
The scheme will award any household that’s moving from fossil fuels to clean heat technology £5000 towards installation costs. Note – the award is for upgrading your existing boiler – this award is not available for new builds.
How it differs from the RHI
It can be surmised that uptake on the RHI was so slow because of the installation costs that would be out of reach of many households. Whilst the RHI is a very good scheme, it does not take into account the high costs of the initial installation, which could be anything from £9000 to £25,000.
So while the award is smaller, it is a lump sum and it’s hoped that households who are having new boilers anyway will find it enough of an incentive to have clean heat systems installed.
Who is eligible for the the Boiler Upgrade Scheme?
To be eligible for the grant the homes must fall into the following criteria:
- Have a valid Energy Performance Certificate
- Be an existing building – no new builds
- Have at least one quotation from an MCS certified installer
- Have good insulation – this is detailed in the EPC.
How to apply for the grant
You can apply via regisered installer for air source heat pump grants.
