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Government announces plans for the future of green heat

Posted by Anna Carlini on 15 May 2020 at 4:21 pm

An eagerly awaited consultation on the decarbonisation of heat has produced proposals with significant implications for the domestic green heat sector. Ongoing until July, the consultation has produced encouraging information on the replacement of the Renewable Heat Incentive and has revealed plans of government support for installing low carbon heat technologies in domestic settings. These schemes will not only boost the green heat industry in the UK, but help the country achieve our committment to reaching net zero carbon emissions by 2050.

With the current Renewable Heat Incentive (RHI) scheduled to end in 2021, it has been unclear how the government would encourage the uptake of renewable heating, considered one of the biggest barriers to achieving our climate targets. After the government’s announcement that gas will be banned from new builds from 2025, the intent to move away from fossil fuel heating was extremely clear, but the exact approach of how this would take place was not. Therefore these poposals which clearly set out the plan for decarbonising heat have been welcomed by industry and gives some clarity and reassurance in very uncertain times.

Two aspects of the proposals are particularly significant for households and domestic installers. This includes clarification on the existing RHI scheme, which will ultimately be phased out after 2022, and the plans for a Clean Heat Grant, which could replace the RHI and help reduce the barrier of upfront costs to renewable heating mechanisms.

The Renewable Heat Incentive

The existing Renewable Heat Incentive is a financial scheme to encourage the deployment of renewable heating systems. It works through quarterly payments to applicants and is eligible for technologies such as heat pumps, biomass boilers, methane gas and solar water heaters. The RHI was due to close for new applicants in March 2021 and the consultation has revealed that it will close on this date for non-domestic applicants as scheduled. However, it has also stated that this scheme will be extended until March 2022 for domestic applicants, to ensure a smooth transition to the new grant scheme, the Clean Heat Grant.

The Clean Heat Grant

One of the most significant announcements to come from the consultation is that of the Clean Heat Grant. This scheme would offer financial support towards the upfront cost of a low carbon technology. Rather than the tariff system of the RHI, the Clean Heat Grant will be a capital grant paid for through exchequer funding. The grant itself will be up to £4,000 for each household or business installing an eligible green heating system up to 45kW. It is scheduled to begin in 2022, with funding initially committed for two years.

The scheme will be heavily aimed towards heat pumps, but in limited circumstances will also include funding for biomass boilers, despite previous expectations.

This scheme could provide a huge boost to the heat pump industry in particular and make the possibility of retrofitting cleaner heating far more affordable. It is after all the upfront cost which proves a barrier to the popularity of this technology.

This long awaited clarity for the domestic sector on the future of green heat beyond the RHI has come at a crucial time in an uncertain world. The Clean Heat Grant will help boost confidence in renewable heating technologies and their supply chains, making low-carbon heating the way of the future. What’s more, in the light of the recent disruption to the UK economy in the wake of COVID-19, the green heating industry could be a pathway to a positive recovery. Investing in green heat will create jobs whilst simultaneously reducing the country’s emissions and improving air quality and health. It looks like decarbonised heat is set to play a big role in achieving a sucessful green recovery.

Read the proposals published by the consultation here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/881622/future-support-for-low-carbon-heat-consultation.pdf


Sources

https://www.businessgreen.com/news/4014545/government-reveals-plans-accelerate-low-carbon-heating-rollout?mc_cid=92fd026e5a&mc_eid=2072e9a532

https://theenergyst.com/beis-touts-4k-grant-for-heat-pumps-plus-green-gas-subsidies/

 

If you have a question about anything in the above blog, please ask it in the comments section below.

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Comments

1 comments - read them below or add one

Jeff B

Jeff BComment left on: 22 May 2020 at 11:38 pm

Having received RHI payments towards a biomass boiler I understand that I can only have “one bite of the cherry”, so if I decided to change to an ASHP in the future I would have to 100% finance it myself. I wonder if I would be able to apply for the proposed £4000 grant though? The reasons I might like to change would be:

1. I am disappointed with the pellet boiler I have. It requires monthly servicing in order to keep it in first class running condition. I can manage this ok myself but if anything happened to me, my wife would not be able to cope with its complexity. In addition both the manufacturer and the installer have gone out of business, so regular supply of spare parts in the future is in doubt. Ironically the EPC rating for the house is worse with the wood pellet boiler than it was with the previous oil fired boiler! This is because, for the purposes of the EPC, the surveyor used a generic efficiency figure for the pellet boiler of 66%. In reality it is >93%, but it was never SEDBUK listed.

2. I have done a huge amount of work to insulate and draught-proof the house over the last few years, so the heating demand is falling. I regret that I did not consider this first – I would now strongly advise anyone to look at this aspect first before renewing their heating system. UFH will not be possible here but use of larger radiators is a distinct possibility, hence my interest in an ASHP.

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