The Government is proposing a Clean Heat Grant Scheme (CHGS) that would commence from 2022, offering upfront funding of up to £4000 for each household or business purchasing renewable heating technologies. A tariff-based Green Gas Support Scheme is also being proposed to increase the percentage of biomethane available on the gas grid from anaerobic digestion facilities.
What will happen to the Renewable Heat Incentive?
The CHGS would replace the RHI tariff scheme which was scheduled to close to new applicants from April 2021 but has now been extended by another year. The RHI was set up to convert 12% of UK households to renewable heat by 2020 but is expected to reach 8-10% instead. In 2018 the RHI was criticised by the Public Accounts Committee for failing to provide value for money for the £23bn it is expected to cost taxpayers.
What technologies will the CHGS cover?
According to the Department for Business, Energy and Industrial Strategy (BEIS) the grant is targeted at supporting air, ground and water-source heat pumps in households and small non-domestic buildings. Systems with a capacity of up to 45kW will be eligible for the scheme and high and low temperature systems. The Government had originally proposed to bar biomass boilers from securing financial support in urban areas due to concerns over air pollution but has now agreed to support them in limited circumstances where properties have been deemed unsuitable for a heat pump.
What technologies are not covered?
Hybrid systems including hybrid heat pumps will not be supported. Process heating, biogas combustion, solar thermal and heat networks have all been excluded too.
How will it be administered?
BEIS is suggesting a voucher system for delivering the grant which will be issued on a first come, first served basis. Funding has been committed for two years to March 2024, after which the scheme will close to new applicants, and applications will be reviewed on a quarterly basis to ensure that budget caps are not exceeded, and the fund depleted quicker than anticipated.
As with the RHI, Ofgem would be appointed to administer the scheme. To redeem the voucher, proof of installation will be needed as well as technical evidence related to installation, commissioning and building eligibility, such as an MCS certificate.
BEIS proposes that the process should be installer-led, with proof of installation provided by the installer and the grant paid directly to the installer post-installation. MCS certification or equivalent for products and installers, and installer membership of a consumer code will be required for the scheme.
How does the CHGS level compare internationally?
International grant levels vary widely, but according to BAIS most European grants are set at the 2,000 euros (£1768) level. The grant in Ireland is currently 3,500 euros (£3,095).
What else is the Government doing?
BEIS says it intends to publish a Heat and Buildings Strategy later in the year that will outline other actions it intends to take to reduce emissions from buildings including energy efficiency measures. Up to £9bn will be made available in support of the strategy over the next decade. Government has already consulted on a Future Home Standard to encourage low carbon heat in new build properties and on minimum energy efficiency standards and will be consulting separately on regulations to phase out the installation of high carbon fossil fuel systems in new and existing buildings off gas grid during the 2020s.
How can I respond to these proposals?
The ‘Future support for low carbon heat’ consultation closes on July 7. The consultation documents are available here.