What is the Renewable Heat Incentive?
The Renewable Heat Incentive (RHI) is a Government scheme that was introduced in 2011 to replace the Low Carbon Building Programme. Its aim is to encourage people to invest in renewable forms of heating, by paying them for the renewable heat they produce. The commercial segment of the Renewable Heat Incentive has been running since 2011, and the domestic part started three years later in 2014.
The renewable technologies that the RHI covers are biomass boilers, air to water heat pumps, ground source heat pumps, water source heat pumps, and solar thermal. If you have any of these renewable technologies installed, it is most likely that you are already registered for the RHI, however if you are not yet registered, we strongly recommend you apply to the scheme. The payments should help cover the initial install cost of the renewable technology that has been installed, and potentially cover any maintenance costs in the longer term.
When is the Renewable Heat Incentive being replaced?
The Renewable Heat Incentive is set to last until 31st March 2022. Originally, the scheme was intended to finish in March 2021, however the Government chose to extend it by an additional year due to its popularity.
When the RHI scheme ends in March 2022, it will be replaced by the Clean Heat Grant – this scheme is due to start a month later, in April 2022.
At the moment, the Government are proposing to make the Clean Heat Grant available for just two years ending in March 2024, and the funding is limited to £100m.
What is the Clean Heat Grant?
The Clean Heat Grant is being directed towards households and small non–domestic buildings across the UK. It will help with the upfront installation cost of heat pumps which provide space heating and hot water. The big advantage of the Clean Heat Grant over the RHI is its simplicity – doing away with the RHI’s heat demand based system.
The Government run scheme will provide grants of up to £4000 towards heat pump installations. It will cover ground source heat pumps, air source heat pumps, and water source heat pumps. The scheme suggests that the eligible heat pump installations must have a capacity of 45kW or less, which explains why this scheme is directed to smaller scale installations, leaving commercial building to fend for themselves.
In recent consultations regarding the Clean Heat Grant, the Government have implied that the grant could support biomass installations as well, however only when absolutely necessary. This is mainly due to the Committee on Climate Change who state that heat pumps offer the greatest potential for heat decarbonisation.
Are you eligible to get the Clean Heat Grant?
The Government have announced a few requirements that the applicant must meet in order to be eligible for the Clean Heat Grant. These are detailed below –
- You must hold a valid EPC for the property in question. This means the EPC should be one issued in the last ten years. You can use the EPC register available to everyone on the Government website to check if your property has a valid EPC.
- On the valid EPC, there must be no recommendation for loft insulation and/or cavity wall insulation. In some cases, this requirement will be exempt. For example, if your property is a listed building. The Government have also proposed that the insulation exemptions will follow those currently in place on the domestic RHI scheme.
- The voucher application process will differ slightly from the domestic RHI. All applicants will need an assessment from at least one installer, and will need to submit a quotation. This is purely for administrative purposes, as it will reduce the amount of speculative applications and will enable more administration to be completed at the first stage.
Is the Clean Heat Grant better than the Renewable Heat Incentive?
In terms of future ideas, the Clean Heat Grant is part of a bigger Clean Growth Strategy, published in 2017, which is aiming to decarbonise the UK’s heat and phase out high-carbon fossil fuel installations in the 2020’s for off-gas properties.
However, for the consumer there is a significant reduction in funding. The domestic RHI is paid via a tariff system over seven years, and for a standard renewable heat project the consumer could expect to receive around £28,000. Whereas the Clean Heat Grant is limited to £4000 funding.
There is also a decrease in the variety of heating systems eligible for the Clean Heat Grant, compared to the RHI. Process heating, solar thermal, biogas combustion, hybrid heat pumps, and heat networks will be excluded from the Clean Heat Grant.
The key benefit is the scheme’s simplicity – a grant based scheme is far easier to run than one based on heat demand and export meters!
Our thoughts…
Here at TheGreenAge, we think that the Clean Heat Grant is a step in the right direction to reduce carbon heat in the UK.
Due to previous problems with the Renewable Heat Incentive involving the overall costs, the decreased amount of funding that the Clean Heat Grant will offer could be better in the long term, and could allow for gradual progress instead of jumping in at the deep end.
If you are thinking about installing a heat pump and have confirmed your eligibility for the Clean Heat Grant, we recommend participating in this scheme when it launches in early 2022. However, if you can act quickly, it may be worth considering trying to apply under the RHI scheme as we think this will be far more generous.
Where do you get the figure of 28,000 for RHI from? For an air source heat pump for a 4 bed detached house we were quoted around £7000 paid over 7 years and we would have to foot the quoted £15K installation costs upfront ourselves, as our whole heating system would need to changed. Not much of an incentive to go green is it, and we certainly don’t have that kind of money sat there to do it? So my 3 year old oil fired central heating will stay until I have no choice but to change it!!!
The £28K they state would be for a very large GSHP not an ASHP
You might be better off covering your roof in PV panels and using the electricity and cheap night rate juice in a heat store to try and reduce your oil consumption…. I couldn’t be more amazed that the govt think £4k is going to encourage anyone to go greener…utterly mind boggling- all they have to do is tax us in order to give us it back again for going greener.- simple and say – VAT free for green technologies and their installation. Not rocket science is it- but clearly there is no political will to do anything that could disrupt existing businesses in order to lead the world with new green businesses and save the planet. We continue our steady decline to third world status.
You ask such a pertinent question re this £28K claim. It would be welcome if Green Age would actually reply to your question.
This is refering specifically to Ground Source Heat Pumps, where the heat demand limits are higher (30,000kWh versus 20,000kWh) and the RHI rates are higher. (approx 20 pence / kWH).
And yet the text specifies ‘standard renewable heat project. Having tried to do GSHP it is not standard. Quoting the big figure may sound good but in practice it’s a transparent manipulation of the numbers, James.
I’m a developer and am in the process of deciding which heating & hot water systems to specify for a new apartment block with 20 two bed apartments. The cost for a communal heat pump solution is around 3 times the cost of gas fired boilers @ £120,000. I’d prefer to install renewable solutions and am already looking to install rainwater harvesting, 30kw of solar PV and 20kw of solar thermal on the project, however at £80,000 additional cost it just makes it unviable. Would a project like this be eligible for the Clean Heat Grant? I also saw the new Clean Heat Grant is limited to 45kw. Is that per dwelling? My development would have a 98kw High COPs air to water heat pump with heat metering to each leaseholder.
Just read an interesting case study on kensa heat pumps about apartment blocks and ground source heat pumps worth having a look.
Totally inadequate. Anything less than 100% of the total cost of replacement paid directly to the fitter by the government will make green heating unaffordable.
I haven’t got and will never have the cash to do anything other than a simple straight boiler replacement when the existing boiler needs replacing.
In reality my options are live without heating and hot water and risk illness and death in cold winter’s or just end it, it’s effectively an execution of those who have low incomes that don’t qualify for benefits, on the presumption that more help will be given to those on benefits later.
All this grant does is add 4000 to a bill I can’t pay, as if a grant is given installers will just up their prices
What an utterly inadequate response from our government to the Climate emergency. The cost of retrofitting the average UK home ( with decent insulation and green heating, hot water and electricity) has to be in the range £30-£50k and the state needs to be paying at least 80% of that up front to get people to change. There is also a massively increasing range of technologies that have been excluded from this eg thermal heat stores, solar thermal panels and good old PV and batteries
No. How do you expect the government (tax payers money) to be footing 80% of an investment in your own property!? Ridiculous mentality. When the average uk house (I agree crap quality in general) is about 250k+ surely it is acceptable for the owner to remortgage, take 20-30 K equity out, to do internal or external insulation, and heating system upgrade that will then remain in place / work for 15-20 years, in order to end up with a house that vastly reduces the carbon footprint of its needs for years to come. Maybe the government simply needs to back a very low interest rate remortgage, that is certified / and is invest for a green refurb.
Ha, lots of people remortgage to spend on cars or holidays so not a bad idea.
Thermal heat store, solar thermal, and PV and batteries are not useful for domestic heating in the UK.
hello, can you advise if the grant is available for a new house being built this year for our disabled son who will be the owner of the property. thank you K lewis
Very disappointing that there is no replacement for the non-domestic RHI. Where are the incentives to persuade businesses to install ASHPs or solar panels? Where are the incentives for large-scale building renovators and new-builders like my employer to stop using gas boilers? It’s all stick (no gas boilers from 2025 in houses) and no carrot, Building refurbishments are treated particularly shabbily, when it’s typically already more expensive to renovate a building than build a new one: we pay full-rate VAT, there are no grants or tax exemptions for choosing energy-saving measures, which are, inevitably, much more expensive than current building materials, and buyers or tenants aren’t interested in paying more compared with a second-hand house, no matter how much you explain the eco-friendliness and low running costs of renovated housing. All they see is the initial cash outlay and they seem to regard your very existence as a boo-hiss developer as an insult.
I have a solar PV system on the maximum feed-in tarrif. I can’t expand the system without losing the level of tarrif. I could perhaps add an array of PV panels to directly feed my immersion heater via an inverter. Is this a feasible option to cut my gas bills.
I am afraid you are incorrect. As of the death of new FITs this year, being replaced By the Smart Energy Guarantee, there is no longer a limit on how big your solar system can be, in fact there is more to be made for systems over 10kw. You do need permission from the Distribution System Operator (DSO) I too get the high rate of FITs for my 3.96 KW system and have just ordered a further 3.6Kw. There will be 2 inverters, one for the old system generating FITs payment just as before, but now a second system generating SEG payments. SEG is much less as a direct payment but there are some interesting tariffs which become available. Have a look at Octopus Agile for example
We currently receive RHI for a biomass it is due to end soon. We are looking at replacing it with air source pump can we claim RHI again ?
Hello, I am buying an 18th C stone house that has no radiators/ plumbing. I want to put in an electric heating system.
If I put in aheat pump will I have to introduce plumbing and water radiators all through the house?
Are Heating storage solutions eligible under this new grant. These run off overnight mainly renewable energy and are probably the best for UK housing stock greater than 70 years old. Costs are better also and no need for new tanks etc.
Hello – we installed a GSHP for a 4 bed detached house and will receive approx £7000k return in RHI over the 7 years. Where does the £28K figure come from?
I just wish sellers of green technology would be honest and not give the maximum possible amount available, rather than what actually applies to the property and scheme In question. It really puts me off dealing with any of them.
£28K payment sounds well over what we are being paid for a GSHP – (for a detached 4 bed – we are getting £7K over 7 years) not £28K!!!
is there a new grant £4000 for solar hot water please?
‘There is also a decrease in the variety of heating systems eligible for the Clean Heat Grant, compared to the RHI. Process heating, solar thermal, biogas combustion, hybrid heat pumps, and heat networks will be excluded from the Clean Heat Grant’
Another reason why this government is not serious about moving away from fossil fuels.
There are some sensible comments contributed below but what a lot of wingers too. The government are offering grants to encourage us to do what we should be doing anyway. Reducing our carbon foot print – grant or no grant. So to the wingers the answer is simple. Sell your house for a smaller house that you can afford to insulate and heat properly or turn your heating down or even off and wear more clothes. Not as comfortable I agree but its not long since we did that. The wingers seem to conveniently forget we are the government – and we are footing the bill. Also we all need to make less car and airplane journeys and this applies to all of us not just ‘everyone else but not me’.
My interest. I do up houses, insulate them to the nines, ASHP heating whether there is a grant or not and rent them out. So I feel I’m putting my money where my mouth is. Wingers -shut up and be grateful.
For the VAT contributor ‘Green Energy’ is already largely Zero rated with tax incentives for the industry which should please him..
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Are there any grants available for ground source heat pumps after your NDRHI has finished can you apply for anything else beyond the original scheme?