In this article

1. What are heating & home improvement grants

2. What heating & home improvement grants are available

3. What is an air source heat pump

4. What is the Renewable Heat Incentive (RHI)

5. What is the Government Green Homes Grant (GHG)

6. Introducing the Igloo Clean Heat Switch

If your home is fitted with a boiler or heating system that’s inefficient or out-dated you could be spending far more than you need to on your energy bills each year. What’s more, older, less efficient gas boilers release higher levels of carbon emissions into the air – heavily contributing to climate change.

In this article on heating & home improvement grants, we’ll explain how to get help with funding to replace your home’s existing heating system or boiler for a green, renewable heating system such as an air source heat pump by making the most of any Government grants that are available.

We’ll also explain how you can get paid by the government for the renewable heat you produce for your home by registering for the Renewable Heat Incentive (RHI), and we’ll look at the Igloo Clean Heat Switch which will help you to secure low-carbon heating at a greatly reduced upfront cost.

1. What are heating & home improvement grants?

Home improvement grants are free government grants for homeowners that help you to improve, adapt or update your home to make it more comfortable, better for the environment and cheaper to run. Funding may cover the cost of labour to carry out approved works such as air source heat pumps or insulation, and the upfront costs of investing in these new green technologies that can benefit your home’s energy efficiency, reduce your carbon footprint and help reduce your energy bills.

Home improvement grants are aimed at encouraging homeowners to adopt greener ways of heating their home, such as the Renewable Heat Incentive (RHI), which rewards those who improve their homes’ energy efficiency through actions such as swapping a gas boiler for a green heating alternative.

2. What heating & home improvement grants are available?

In 2010, the government launched a new boiler grant commonly known as the boiler scrappage scheme, which helped homes with older, inefficient boilers to upgrade to a new, A-rated boiler.

While the boiler scrappage scheme has ended, the government still aims to reduce our reliance on fossil fuels altogether as we look to meet the UK’s obligations of net zero emissions by 2050. So it replaced the old scheme with new grants helping homeowners to install green heating solutions in their home and get paid for doing so.

Introduced in April 2014, the Renewable Heat Incentive (RHI) aims to incentivise homeowners financially to reduce their carbon footprint. The scheme rewards homeowners for adopting a green solution, such as replacing an old gas boiler with an air source heat pump by paying you for the green energy the renewable heating system produces.

3. What is an air source heat pump?

An air source heat pump is a green way to heat your home that extracts heat from the outside air and compresses it to create high-level heat used to provide heating and hot water to your home.  

An air source heat pump can replace an old boiler entirely or work in tandem with an existing one, which is known as hybrid heating. Under the hybrid approach, the air source heat pump provides the bulk of your home’s heating needs and your boiler is engaged intermittently when needed.  

In short, air source heat pumps can save you money on your fuel bills, lower your home’s carbon footprint and qualify you for payments through a government green scheme such as the Renewable Heat Incentive. If you’re new to air source heat pumps, you can read more about the benefits of switching your boiler to an air source heat pump or you can check out our article where we bust the most common myths about air source heating. 

4. What is the Renewable Heat Incentive (RHI)? 

Launched by the UK government in April 2014, the Renewable Heat Incentive (sometimes shortened to RHI or Ofgem RHI) is a type of new heating grant that helps you upgrade to a renewable heating system by paying you money, in quarterly instalments over 7 years, for the green energy your home produces. 

The RHI scheme applies specifically to green heating solutions you adopt in your home, of which air source heat pumps are just one of three eligible technologies backed by the Government. The other two are solar water heating and biomass boilers. The payments you receive from this heating grant are guaranteed for seven years, but in order to qualify you must register for the Renewable Heat Incentive within one year of installation. You will need to apply for the scheme yourself, but any reputable installer will be able to assist you with any questions you may have.  

It’s estimated that the average home switching to an air source heat pump can expect to receive just over £11,000 in payments over the 7-year period.1

Alongside the Renewable Heat Incentive (but not as standalone funding), there is an additional scheme called the Metering and Monitoring Service Package (MMSP for short). The MMSP collects data on the efficiency of your heat pump to ensure it always works as it should. In return for this heat performance data, you are eligible to receive additional payments of £1,610 from the Government for providing this data.

Who is eligible for RHI payments?

The RHI is open to eligible homeowners living in England, Scotland, or Wales. It’s important to understand that air source heat pumps aren’t appropriate for every type of home as the installation requires a unit (similar in size and appearance to an air conditioner) to be fitted close to the exterior of your home at ground level. For this reason, many types of flats or apartments, as well as listed buildings may not be suitable for installation. However, it’s always worth checking your eligibility with an installer before considering other heating options.

Another thing to note is that it’s the homeowners themselves who will qualify for the seven years' worth of Renewable Heat Incentive payments. In other words, if you live in a rented home which has an air source heat pump installed, it’s your landlord, not you, who will receive the income generated from the energy your home’s heat pump produces.

5. What is the Government Green Homes Grant (GHG)? 

Important notice: The Government has withdrawn the Green Homes Grant scheme, with the new deadline for applications being March 31st, 2021 instead of March 2022. While the Green Homes Grant is no longer available, we have recently launched the Igloo Clean Heat Switch to help with bringing down the upfront installation costs of installation substantially.  

The Green Homes Grant, introduced by the government in 2020, is a green energy grant that pays homeowners a lump sum of up to £10,000 towards the cost of installation for eligible home improvement measures. The Green Homes Grant aims to upgrade over 600,000 homes across England by encouraging homeowners to make their homes more energy efficient by investing in improvements such as air source heat pumps and insulation.  

The Green Homes Grant covers a range of home improvements, from installing an air source heat pump, to cavity insulation and double-glazing. The eligible home improvements are split into primary and secondary measures.  

Spending your voucher on a primary measure is mandatory as they provide the highest benefit, while secondary measures are optional. If you decide to go for two measures, any vouchers issued under the scheme must be put towards a primary measure first, but any remaining voucher amount can be put towards a secondary measure. You can see the available measures below: 

Primary measures: 

  • Air source heat pumps 

  • Solid wall insulation  

  • Under floor insulation  

  • Cavity wall insulation  

  • Loft insulation  

  • Flat roof insulation  

  • Room in roof insulation  

  • Insulating a park home 

  • Solar thermal  

  • Biomass boilers 

  • Ground source heat pumps 

Secondary measures: 

  • Draught proofing 

  • Double / triple glazing 

  • Secondary glazing 

  • External energy efficient doors 

  • Heating controls 

  • Hot water tank thermostats and insulation 

Who is eligible for the Green Homes Grant scheme?

Anyone who owns a home in England is eligible for the Government Green Homes Grant. However, the grant is means tested, which means your combined household income will be taken into consideration when deciding your grant amount. An average household in England, on an annual income of £15,000 or more, can qualify for up to two thirds of the cost of their works’ to be funded by the green scheme, up to a maximum value of £5,000. It’s then up to the homeowner to make up the shortfall. 

That doesn’t mean that those living in low-income households or claiming benefits are ineligible to apply for a green energy grant – much the opposite in fact. If you meet the Green Homes Grant criteria for a low-income household, you’ll be eligible for a pay-out of up to £10,000, which you can put towards covering the entire costs of the works. This means the bulk of Government Green Homes Grant applicants will receive more than half the money needed to upgrade to an air source heat pump, whilst low-income households should be able to cover 100% of the costs.  

How is the Government Green Homes Grant (GHG) paid?

Unlike the Renewable Heat Incentive, which pays out each quarter, the Green Homes Grant is awarded in form of a one-off, monetary voucher, redeemable with the supplier who carries out the works in your home. Under the eligibility rules of the Ofgem RHI and the Green Homes Grant scheme, you can only receive the pay-outs if you use a TrustMark registered company or a member of the Microgeneration Certification Scheme (MCS) to complete the works. Igloo are approved installers of air source heat pumps under both accreditations, so appointing us for your install guarantees your payments will be made. 

Important notice: The Government has withdrawn the Green Homes Grant scheme, with the new deadline for applications being March 31st, 2021 instead of March 2022. While the Green Homes Grant is no longer available, we have recently launched the Igloo Clean Heat Switch to help with bringing down the upfront installation costs of installation substantially. 

6. Introducing the Igloo Clean Heat Switch

You can now unlock your RHI payment amount straight away and receive up to 50% discount towards the cost of your installation, instead of having to wait to be repaid by the government over 7 years. This is known as the Igloo Clean Heat Switch, and is intended to accelerate the adoption of green and renewable heating solutions.  

So how does this work, you ask? Assigning your installer as an investor allows the installer to claim the RHI payments in your stead once you have applied for the scheme. In exchange, they will cover a large portion of your upfront installation costs, which reduces the amount you pay upfront. As a result, the overall costs of an air source heat pump installation become comparable to those of a boiler replacement, ultimately helping you to benefit from greener energy solutions sooner. 

As part of our Igloo Works service, we are excited to be able to offer this to our customers – you can find out more information by clicking below.

Any questions? We’re all ears!  

At Igloo we specialise in Air Source Heat Pumps and Hybrid Heating as part of our Igloo Works range, so our expert team are very familiar with the eligibility criteria and the application process for the Renewable Heat Incentive and the Green Homes Grant. 

If you have any questions about applying for one of these home improvements grants, or you just want to talk to us about the grants you may be eligible for, contact us today on 0333 016 4500, or email us via our contact page

More information on the Assignment of Rights, which is administered by Ofgem, can be found here

1 Source: PawPrint