Renewable Heat Premium Payment Scheme

The government launched a £15million Renewable Heat Premium Payment Scheme this week which offers grants to UK households of up to £1,250 towards installing renewable heating systems.

The initiative will be available from 1st August and run until March 2012, and plans to receive around 25,000 applicants. It will work on a first-come first-served basis, and the funding will go towards installing new biomass boilers, solar panels and ground or air source heat pumps.

The government is primarily directing the scheme at 4million rural households where there is no connection to the main gas supply. These households are currently paying a premium to heat their homes, by using things like domestic heating oil.

The initiative is similar to the government’s Renewable Heat Incentive (RHI) where households are rewarded for installing solar panels.

The government is confident its Renewable Heat Premium Payment Scheme will encourage many households to invest in renewable heat sources. However consumers may be reluctant, since the installation of a biomass boiler for instance costs between £6,500 – 11,500.

The scheme will be managed by the Energy Saving Trust, and the following grants are available from next month:

  • Biomass Boiler – households who not connected to the mains gas network are eligible to £950
  • Solar Thermal Hot Water Panels – £300
  • Air Source Heat Pump – households who are not connected to the mains gas network are eligible to £850

Greg Barker, Climate Change Minister said, ‘Today starts a new era in home heating because we’re making it more economical for people to go green by providing discounts off the cost of eco heaters. This should be great news for people who are reliant on expensive oil or electric heating as the Premium Payment scheme is really aimed at them.’

Philip Sellwood from the Energy Saving Trust said, ‘When people have the kit installed in their homes they really see the benefit. Of course there is still more to be learnt about how to get the most out of the technologies – but the more they’re out there in people’s home, the more they become part of daily life. Without a doubt, the main barrier that prevents people from taking the plunge is the up-front capital cost. This is a great start in overcoming this obstacle.’

For more information on the Renewable Heat Premium Payment plan, visit the Energy Saving Trust website: