The funding changes that could affect you!

As of April 2022, the domestic Renewable Heat Incentive (RHI) will no longer be available to new applicants. It is set to be replaced by the Boiler Upgrade Scheme (BUS). The change comes as part of the Government’s 10-point plan to achieve target net zero in the UK with £450million allocated to the scheme.

Both schemes were created with the focus of helping UK residents to replace their old oil and gas boilers with renewable heating technology such as Air source heat pumps.

The Renewable Heat Incentive or RHI as it is commonly called, is a government grant scheme which offers the ability to collect quarterly payments over 7 years based on the savings made from switching to renewable heating. These payments would commonly cover the costs of installing a renewable heating measure with many customers profiting from it. However renewable heating systems are not cheap, and many UK residents find it difficult to outlay such a large amount of money upfront. This is where the Boiler Upgrade Scheme looks to improve this funding system.

The domestic Renewable Heat Incentive (RHI) scheme will close to new applicants from 31st March 2022.

The Boiler Upgrade Scheme will replace the Renewable Heat Incentive from 1st April 2022. It will offer the UK with £450million of funding towards making the switch to renewable heating technologies such as heat pumps and biomass boilers. Each eligible UK household will be able to claim £5,000 upfront towards the cost of replacing their old gas or oil boiler in favour of a renewable heating system.

Currently the Boiler Upgrade Scheme (BUS) is set to run for 3 years starting April 2022.

The main difference to note between the two schemes is that the Boiler Upgrade Scheme funding is upfront rather than paid over 7 years like the Renewable Heat Incentive. This means applicants can use the funding to directly offset some of the install costs therefore making renewable technology more affordable, something that the RHI scheme could not provide.

Whilst the Renewable Heat Incentive offered more funding, this was spread quarterly over 7 years and would not help with the high upfront costs of renewable heating.

Another major change with schemes is that properties must now be properly insulated. On the RHI scheme this was simply a suggestion to enable better funding & savings. The BUS however requires that loft and cavity wall insulation are not recommended upgrades on the home’s energy performance certificate (EPC).

So which grant scheme do we recommend? The answer is pretty simple!

If you have the ability to pay for a renewable heating source upfront, we would strongly recommend the Renewable Heat Incentive before it ends on 31st March 2022. The RHI scheme can offer up to £25,180 in funding for a Ground source heat pump system on a 3-bed home over 7 years. The same property would only receive £5,000 under the new Boiler Upgrade Scheme.

However, should you not have the ability to pay the larger upfront costs of a renewable heating measure then the Boiler Upgrade Scheme is for you! The Boiler Upgrade Scheme offers £5,000 upfront which should help to bring the costs down to something closer to that of replacing a gas or oil boiler. You will also still see the savings of using a renewable energy source.