Heat Pump Government Grant – The RHI – How much money can you earn from heating your home?
Government Funding – The Renewable Heat Incentive (RHI) – Available until March 2022
Is a government funding mechanism to encourage the installation of heat pumps for those wishing to replace their existing Gas, LPG or Oil boilers. The RHI funding is payed over seven years on a quarterly basis. The total amount received is based upon the Space Heating and Water Heating demand figures (KWH per year) that are shown on your Energy Performance Certificate (EPC), as shown below. There may be instances that your system will be metered for payments instead of the EPC figures; we can guide you on this.
You can see what your RHI payment figure will be if you try out our Instant Heat Pump Quote:
The End Of The RHI Funding Scheme
Is the domestic RHI being replaced?
Yes, from April 2022 onwards. The UK government has announced in its latest Heat and Buildings Strategy that the domestic (RHI) Renewable Heat Incentive will finish on 31st March 2022. This will be replaced by the new (BUS) Boiler Upgrade Scheme formerly known as the (CHG) Clean Heat Grant; this scheme is due to start a month later, in April 2022.
The Boiler Upgrade Scheme will offer an upfront £5000, or £6000 government voucher given to households to help towards the capital costs of installing clean heat from low carbon technologies such as heat pumps. The scheme will run for 3 years starting April 2022, and the government has set aside a budget of £450 million under this scheme.
Funding is currently limited to £450m which means only 90,000 households can claim £5,000 over the next 3 years. This is on a first come first served basis. The government has not announced an extension to the scheme in 2025. Eligibility and criteria are the same as the RHI with regards to your properties EPC and insulation.
Under the current RHI you could receive up to £11,000 funding in total that is paid on a quarterly basis over a 7-year period but, under the new Boiler Upgrade Scheme you would receive an upfront voucher but only £5000 for an Air Source Heat Pump or £6000 for a Ground Source Heat Pump.
Who can access the (BUS) Boiler Upgrade Scheme?
Almost anyone who owns an existing home with a boiler should be able to apply for the £5000 or £6000 voucher. New build homes or social housing is not included in this scheme. There is another scheme for Social Housing customers called Social Housing Decarbonisation Fund.
How will the new (BUS) Boiler Upgrade Scheme be delivered?
There will be a voucher-based delivery mechanism led by the installer for grant application and redemption. This will be managed by an independent scheme administrator. Vouchers will have a set validity period to ensure they are utilised in a timely manner and that unused vouchers can be recycled.
What is the eligibility and Criteria?
To ensure installations are only undertaken in properties appropriate for low carbon heat technologies, a valid EPC – meaning one which is less than 10 years old – with no outstanding recommendations for loft or cavity wall insulation must be evidenced.
In the interest of simplifying the consumer journey and facilitating scheme uptake, applications may be made for properties with outstanding recommendations for loft or cavity wall insulation, given it is evidenced through a newly generated EPC at the voucher redemption stage that the installation of these types of insulation has been carried out during the voucher validity period. This is to reduce the disruption on the property owner who may wish to have the installation of the low carbon heat system and insulation carried out at the same time.
If a property does not require an EPC, or installing the recommended insulation is not possible, an application may still be made if evidence from a relevant body can be provided demonstrating that an insulation exemption applies to the property, or the requisite insulation is already installed. The same insulation exemptions that operate on the domestic RHI will apply to the Boiler Upgrade Scheme. These include reasons such as the property being a listed building or located in a conservation area.
Custom-build homes will not have to provide an EPC to evidence insulation eligibility since they are subject to the latest building regulations with respect to building fabric efficiency.
What consumer protection is there?
The government has stated that they recognise the importance of consumer protection and ensuring installations supported through the scheme are of the highest quality. To implement this, all installers participating in the scheme must be MCS certified and members of a Consumer Code such as RECC that ensures customers are protected by a Trading Standards Institute Approved Code of Practice. The government has also lifted the minimum standard of system design efficiency for heat pump heating system from a SCOP (Seasonal Coefficient of Performance) of 2.5 to 2.8, effectively, this will provide a better level of protection to the consumer ensuring your heat pump running costs are lower.
What are the next steps for the Boiler Upgrade Scheme?
Ahead of scheme launch in April 2022, the government will introduce regulations to deliver the Boiler Upgrade Scheme. They will work closely with the scheme administrator on the detailed design of the administration, digital solution, and scheme guidance to ensure it works for all users. This process will be informed by engagement with users.
Is there a financial benefit for me using the current RHI rather than the new Boiler Upgrade Scheme in April 2022?
Yes, without doubt, you could lose out financially which could be a remarkable difference in the monies that you receive if you proceed with the current RHI now or before the March 31st Deadline. We have provided a couple of following examples:
Example 1 – 3 Bed Semi-Detached.
An average 3 bed semi property built before 1985 with a gas boiler would receive £8,699 from the RHI as opposed to just £5,000 under the new scheme, meaning you have lost £3,699 towards the overall cost of your system which could be 60% of the total cost.
Example 2 – 4 Bed Detached.
An average 4 bed detached property built before 1985 with an oil boiler would receive an estimated £11,709 from the RHI as opposed to just £5,000 under the new scheme, meaning you have lost £6,709 towards the overall cost of your system.
You can check how much money you would save by having a heat pump installed now and before the March 31st, 2022, deadline by using our online Heat Pump quote tool.
For a full explanation of the RHI, please click on the video link below. Ultimately, it means you can earn a fixed income for every kilowatt of heat you produce. To get an indication of the Renewable Heat Incentive (RHI) payment you may be entitled to, the fuel cost savings you might make and the payback period for your capital investment in a heat pump, please use the Instant Heat Pump Quote.
Frequently Asked Questions
“How many running hours for space heating is the calculation based on?
It is based on 1314 hours annually for space heating.
“What are the running hours for hot water?”
This is calculated using the method as stated in MIS3005 (Microgeneration Certification Scheme guideline document).
“What is the design flow temperature?”
This is based on 45°C flow prior to a full MCS design & knowledge of your emitters.
“What heat emitter guide rating is it based on?”
Based on the design flow of 45°C it would calculate to a 4 Star rating.
“What SPF (seasonal performance factor) have you assumed?”
Based on the 45°C flow the SPF for an ASHP would be 3.0 and for a GSHP, 3.7.
“The cost of boreholes seems excessive?”
his may be the case but we have designed to a worst case scenario under MCS guidelines (MIS3005). The final meterage may well be shorter following full design, which would in turn reduce the cost. Our dedicated page on the cost of boreholes explains more.
“What type of heat pump have you priced for?”
We have used MCS approved products from approved manufacturers to give an Indicative installation cost. The final choice of make & model will increase / decrease this slightly.
“Does the installation cost include for an upgrade of the whole heating system?”
No, we have covered a few issues that you will encounter but not the cost of replacing some / all of your emitters (radiators). In the case on some retrofit schemes replacement of emitters may be necessary. More information can be found on our dedicated page.
“Not all ground conditions are the same, what Lambda value (Wm/K) are the length of collectors based on?”
We have assumed a generic 1.7 for horizontal & 2.4 for vertical but would advise a geological survey in advance of installation.
“How have you determined the heat loss of my building?”
We have assumed guideline values based on the age of property and that RHI criteria regarding loft & cavity (if applicable) insulation have been adhered to.