Government Subsidies for Heat Pump Boilers
Renewable Heat Incentive (RHI)
● Ends 31st March 2022.
The government's RHI makes quarterly (tax free) payments to you for the renewable heat produced by your heat pump used for home heating or domestic hot water heating or both. This means that when your heat pump produces 4kW of heat for 1 hour and has a COP of 4 then you will pay for the 1kW.hr electrical power consumption while the RHI will pay you for the other 3kW.hrs of clean green renewable heat produced by the heat pump boiler.
As of April 2020 the RHI rates paid to you are:
● Ground source heat pumps: 21.16 Pence per kW.hr tax free paid quarterly for 7 years.
● Air source heat pumps: 10.86 Pence per kW.hr tax free paid quarterly for 7 years.
Green Homes Grant
● Started September 2020 and ends 31st March 2022.
The Green Homes Grant has been created to accelerate the national switch to low carbon heating and thereby stimulate a green bounce back from the economic slow down caused by the Covid-19 pandemic.
The Green Homes Grant will cover two-thirds of the cost of eligible
heat pump boiler installations up to a maximum of £5,000. You can claim both the Domestic RHI and the Green Homes Grant for a renewable heat installation. You must claim the Green Home Grant voucher first and then notify Ofgem that you have used it when you apply for accreditation to the Domestic RHI. The Green Homes Grant will then be deducted from your Domestic RHI payments.
● You must redeem the voucher and ensure improvements are completed by 31 March 2022.
● Vouchers will cover two-thirds of the cost of eligible improvements, up to a maximum government contribution of £5,000.
● If you receive certain benefits you may be eligible for a voucher covering 100% of the cost of the improvements.
● However, applicable to any eligible cases, the maximum value of the voucher is £10,000.
● Costs covered by the voucher include labour, materials and VAT.
Clean Heat Grant
● Proposed to start April 2022 and end 31st March 2024.
● Replaces the domestic RHI scheme.
● Proposed to be a £4,000 flat rate scheme.
The proposed Clean Heat Grant is expected to provide £4,000 towards heat pump installations in UK households.