£15m renewable heat trial scheme gives grants to off-gas-grid householders

A ‘Renewable Heat Premium Payment’ scheme has been announced by DECC that makes available £15m of support for up to 25,000 renewable heat installations in homes, with a review to take place as the £10m limit is approached.

It will target the 4 million or so households in Great Britain not heated by mains gas, who have to rely on heating such as coal, oil and electric fires, which tend to be more expensive and emit more carbon emissions.

It is open to householders in England, Scotland and Wales, who will be able to apply for grants of up to £1,250 to install systems such as biomass boilers, air and ground source heat pumps and solar thermal panels from 1st August 2011. It will operate on a first-come-first-served basis, and will close on 31st March 2012.

Part of the purpose of the scheme is to obtain further information on the behaviour of the technologies prior to the full commencement of the Renewable Heat Initiative (RHI). Therefore installations will be monitored and any metering equipment will be provided free of charge.

Participants will be required to complete surveys and provide feedback on their experiences.

“Today starts a new era in home heating," announced Climate Change Minister Greg Barker, “because we’re making it more economical for people to go green by providing discounts off the cost of eco heaters. This should be great news for people who are reliant on expensive oil or electric heating as the Premium Payment scheme is really aimed at them.

“Getting money off an eco heater will not just cut carbon emissions, it will also help create a market in developing, selling and installing kit like solar thermal panels or heat pumps.”

The Premium Payment scheme is to be administered by the Energy Saving Trust, which has set up an information line, 0800 512 012 and a website.

Dwellings will have to have in place basic energy efficiency measures before householders can apply. The following technologies are eligible:

• Ground Source Heat Pumps - £1250 grant (for homes without mains gas heating)
• Biomass boilers - £950 grant (for homes without mains gas heating)
• Air source heat pumps - £850 grant (for homes without mains gas heating)
• Solar thermal hot water panels - £300 grant (available to all households regardless of the type of heating system used).

£3m of the £15m will be set aside for registered social landlords to improve their housing stock.

DECC will announce details of how to apply for these funds at a later date.

The Renewable Heat Incentive

The Renewable Heat Incentive is split into two tranches. The first, for industry, business and communities will be open for applications on 30th September, subject to State Aids Approval. The tariffs will be paid for 20 years to eligible technologies that have been installed since 15th July 2009 with payments made for each kWh of renewable heat produced.

Households will be able to apply a year later. The Government has confirmed that renewable heat installations installed in homes since 15th July 2009 could receive the Renewable Heat Incentive once it comes in, provided they meet the eligibility criteria.

They have also confirmed that this could include those who receive support under the RHPP scheme. The Government has not yet published its proposals for how the RHI will work in the domestic sector, including eligibility criteria.