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