Alongside the cost of living crisis, the UK is also battling climate change - an issue which has already led to extreme weather events across the country.
In a bid to reduce the nation’s impact on the environment - and exposure to global price shocks - the Government announced in October 2021 that it would bring in a new grant scheme to help homeowners replace their fossil fuel boiler with a heat pump or biomass boiler.
This initiative forms part of a wider £3.9 billion Heat and Buildings Strategy that aims to help the UK become greener.
So when does it open for applications, who’s eligible - and how much does it cost to install a heat pump?
Here’s everything you need to know.
What is a heat pump?
The Government’s new grant scheme is set to cover two types of heat pump - an air source heat pump and a ground source heat pump.
Both transfer naturally generated heat from outside into your home through pipes filled with a fluid made up of water and antifreeze.
An air source pump brings in heat from the outside air, while a ground source pump takes it in from underground.
Both offer greater energy efficiency than a standard gas boiler as they produce roughly three times the energy they use.
And given gas price increases are outstripping electricity price rises, it could mean they help to take £260 off the average household’s annual energy bill from April.
Although, they will cost more to run (£200 to £300, according to consumer site Which?) than a new gas boiler system.
Heat pumps also cut air pollutants that fossil fuel boilers emit, such as nitrogen dioxide.
The only major downside to them is that they don’t provide the immediate heating boost you get with a gas boiler.
Who can apply for the heat pump grant?
Homeowners can begin the grant scheme process from Friday (1 April).
The Government says green heating systems commissioned on or after this date will be entitled to the financial support.
It defines commissioning as “the completion of installation and set up of the system”.
From 11 April 2022, MCS-certified installers of heat pumps and biomass boilers will be able to open an account for the scheme with energy regulator Ofgem, which is the scheme’s administrator.
And then from 23 May, the scheme will formally open for grant applications and payments - these will be made by the installer.
To be eligible, you have to own the home (or small non-domestic property) you’re installing the new system into and live in either England or Wales.
The property will also need to meet these criteria:
- have an installation capacity up to 45kWth (most homes have this capacity)
- possess a valid Energy Performance Certificate (EPC) that has no outstanding recommendations for loft or cavity wall insulation (unless you have an exemption)
New build properties are unlikely to be eligible, unless you’re building your own home.
Whether you can apply for the grant will also depend on the installer confirming your property can support a low carbon heating system.
A £450 million pot is being made available by the Government over the next three years, which means a maximum of 90,000 pumps will be covered by the scheme - well short of the 4.8 million homes believed to be eligible for the scheme.
If you live in Scotland, you can apply for an interest-free loan to help with the upfront cost of installing energy efficiency measures.
How much does a heat pump cost?
The Government is offering different levels of grant funding depending on what you’re having installed in place of your existing fossil fuel boiler.
You’ll be able to get:
- £5,000 off the cost and installation of an air source heat pump (typically costs between £7,000 and £13,000, according to the Energy Saving Trust (EST))
- £5,000 off buying and installing of a biomass boiler (costs around £16,000)
- £6,000 off the cost and installation of a ground source heat pump (can cost between £24,000 and £49,000 depending on the scale of work needed to install it, EST says)
Biomass boilers will only be covered by the scheme if they’re being installed in rural locations and in properties that are not currently connected to the gas grid.
These grants, as well as the VAT reduction scheme announced during the Spring Statement, mean installing and operating a heat pump costs almost the same as a gas boiler over its lifetime, according to Jan Rosenow of the Regulatory Assistance Project.
Why is government offering the heat pump grant?
Alongside the grant scheme, the Government has also committed to working with industry to make heat pumps cost the same to buy and run as fossil fuel boilers by 2030.
So far, only Octopus Energy has said the grants will bring the price of its heat pumps in line with gas boilers.
The move also ties in with a Government target to ensure all new heating systems installed in homes by 2035 either use low-carbon technologies or support new technologies, like hydrogen-ready boilers.
It is providing £60 million to drive technological innovation in heating systems.
When the grant was announced in October 2021, Business and Energy Secretary Kwasi Kwarteng said: “Recent volatile global gas prices have highlighted the need to double down on our efforts to reduce Britain’s reliance on fossil fuels and move away from gas boilers over the coming decade to protect consumers in the long term.
“As the technology improves and costs plummet over the next decade, we expect low carbon heating systems will become the obvious, affordable choice for consumers.
“Through our new grant scheme, we will ensure people are able to choose a more efficient alternative in the meantime.”
Environmental group Greenpeace said at the time that while it believed the grant scheme and phasing out of traditional boilers was “a decent start”, they said it was not “ambitious enough to adequately tackle emissions from homes or support low income households to switch”.
“What’s also missing from these reports is any mention of a programme to insulate the UK’s millions of draughty homes,” said Greenpeace UK’s head of climate, Kate Blagojevic.
“Low carbon heating must go hand in hand with improving energy efficiency - you can’t have one without the other.”
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