Heat Pump Grants - What Government Grants are currently available?

Earlier this year, the UK government announced its intentions to replace the Renewable Heat Incentive (RHI) with the Clean Heat Grant to help businesses and households decarbonise using renewable technology. The announcement was made in April 2020, with the Clean Heat Grant expected to start from 2022.

An air source heat pump is highly effective and can offer any home or business efficient heating and cooling in any climate. It is a green home solution that converts air into heat energy, offering heat for domestic use. In the UK, heat pumps are becoming increasingly popular and affordable, particularly due to government incentives. The cost of installation depends on many factors, including the size of your home, its insulation state, the brand of the pump, pump size and the pump’s efficiency.

At the time of this article being written, should you decide to purchase an air source heat pump, you will be eligible for government support through the Renewable Heat Incentive (RHI). You will only be eligible if your system is an air-to-water heat pump. The RHI was launched in 2011, with the latest regulations coming into effect in 2018.

The drive for this scheme was to minimise the effects of climate change and promote the 2020 goal of achieving at least 12 percent of heating from renewable sources. Since its launch, the scheme has supported a heat capacity of 900MW for 76,000 households and at least 5,200 MW for about 20,000 commercial settings.

In April 2020, the UK government revealed plans to accelerate the decarbonisation of the country’s heating systems. It unveiled plans of replacing the RHI scheme in the years ahead. For new commercial applicants, the RHI scheme is set to be closed from April 2021 while RHI for existing businesses and homes will face an extension of one more year, to March 2022.

Mixed reactions from different sectors faced the government’s initiation. Frank Gordon, for instance, the REA head of policy said he was satisfied with the project, adding that it would boost the RHI schemes.

‘The government is headed in the right direction, one that will play a huge role in investor confidence and bring to effect the needed heat technology,’ he said.

However, he was disgruntled with the decision to bring the non-domestic RHI to an end, claiming that many businesses would be unable to complete their projects.

The department for Business, Energy and Industrial Strategy (BEIS) notes that replacing Renewable Heat Incentive with Clean Heat Grant opens an avenue for the support of biomass and heat pumps, addressing the problem of upfront costs. The government will focus on replacing the RHI schemes with the goal of zero emissions by 2050. The proposed Clean Heat Grant scheme will offer businesses and households grants of £4,000 for the installation of low carbon heating systems, particularly heat pumps like the Mitsubishi Ecodan heat pump.

Solar thermal, biomass boilers, biogas combustion, heat networks, hybrid heat pump systems and process heating technologies also stand eligible but must have a capacity of no more than 45 kW. This will be focused on offering a flat rate for the different technology types. According to BEIS, the government also looks forward to launching a Green Gas Support Scheme to boost the injection of biomethane into the gas grid. The scheme will kick off in 2022 for households and businesses deploying clean energy heating systems. However, biomass boilers will not be banned in the urban areas despite concerns of the system contributing to air pollution.

Currently, at least 30 percent of greenhouse gas emissions in the UK are as a result of heating. Despite low amounts, there has been progress in decarbonising heating systems even as many households continue to rely on gas boilers. In 2020, the government is focused on sourcing about 12 percent of its heat from renewable sources. Unfortunately, most of the population are unaware of the environmental effects their gas heating has. Energy Systems Catapult research firm earlier this year released data, showing that less than half of Britons understand the relationship between climate change and gas boilers. According to the firm, only 3 percent of the respondents use low carbon heating in their households.

With installation factored in, a ground source pump may cost between £10,000 and £20,000 based on Energy Saving Trust estimates, while heat pumps may vary anywhere between £6,000 and £15,000. Although ground source heat pumps only make up a fraction of the heating systems in the UK (around 2%), they present more advantages over the gas boiler. For instance, unlike boilers that may require extensive repairs and replacement, ground source heat pumps (GSHPs) promise an installation guarantee of 25 years with little maintenance when done correctly.

They also give users a lifespan of 50 years. These heating systems work by exchanging heat with the ground. In 2019, the UK government phased out some renewable heating incentives. If you are thinking of installing a GSHP, note that there is no direct ground source heat pump grant, but you could still benefit from different incentives, including Home Energy Scotland Loan, RHI and Assignment of Rights (AoR).

When it comes to renewable energy systems, Scotland is known to be a leader in pushing for schemes. The country has a loan program that promises interest-free loans of up to £10,000. Designed to encourage homeowners to switch to renewable energy, the government of Scotland devised the program for eligible households.

RHI was initiated and implemented in 2011 by the UK government, structured for households within England, Scotland and Wales. It was intended to convert at least 12 percent of households into renewable heat users by the end of 2020. Eligible households have since been receiving cashback quarterly within the first seven years of their heat pump installation.

The Green Home Grant scheme announced by the Government in response to the Covid-19 pandemic in 2020 to help homeowners make their homes more energy efficient has been confirmed to be available for heat pumps. The details of who will be eligible and how to claim are yet to be disclosed.