From April 2022, homeowners in England and Wales who install a low-carbon heat pump in their houses might get a one-time £5000 grant from the government to assist them to replace inefficient gas boilers. The effort is part of a £3.9 billion programme to reduce carbon emissions in all heating systems by 2035.
The government programme seeks to minimise emissions while also lowering the cost of installing heat pumps so that more people may benefit from them. The goal is to make low-carbon, more efficient heating technologies, such as heat pumps, as affordable as – and sometimes less costly than — gas boilers to purchase and operate.
The plan, however, will work on a first-come, first-served basis, with the government making funds for 30,000 heat pumps per year for the next three years. If your expenses exceed the £5000 grant, you’ll have to pay the difference.
The decision comes following the government’s unsuccessful effort to use the Green Homes Grant to assist homeowners in making their homes more energy efficient. In March 2021, the government stopped the Green Homes Grant to new applicants.
This new award will not be available until next month (April 2022), but an explanation of how it will function is provided below.
Who qualifies for the £5000 grant?
The programme will be open to most homeowners, public landlords, and private landlords in England and Wales. The subsidy, however, will not be accessible to anyone living in social housing or new construction.
Northern Ireland has a separate energy grid than the rest of the UK, and the plan will not be offered in Scotland.
Is it true that everyone will get a £5000 grant?
Most houses who join the initiative (up to the 30,000/year threshold) will get a £5,000 payment for air-source heat pumps. Heat pumps that utilise ground-source heat, on the other hand, will earn £6,000 since they are more costly. However, air-source heat pumps are projected to be required in the majority of homes.
This money is intended to cover the cost of everything from the pump to the installation, as well as any necessary house modifications. You may, for example, need new radiators that are compatible with heat pumps. Any shortage on the final bill, however, will be demanded of you – see below.
Is £5,000 sufficient to pay all installation costs?
The £5,000 is unlikely to cover all installation costs, so you’ll be responsible for the rest. On average, heat pumps (together with their installation) cost between £10,000 and £12,000. The idea is that you’ll wind up spending about the same as if you had a gas boiler.
The cost of a heat pump is determined by the size of your house, the heat pump provider you choose, and the kind of heat pump you install.
You may be able to pay for any outstanding debt in instalments, depending on the terms of the provider. Here at Elite Group, you can cover any remaining costs with affordable no-interest finance, contact us to learn more.
How do I submit my application?
Households do not apply for the award; instead, you must work with a heat pump installer who will apply for the subsidy on your behalf to energy regulator Ofgem. Ofgem will give a voucher verifying the grant amount after your application has been assessed.
From the day the voucher is granted, the installer will have a predetermined amount of time to perform the installation. For the most part, most instals will take three months.
When the installation is finished, the installer will create a microgeneration certification certificate, which verifies that all eligibility requirements have been satisfied. After that, Ofgem is notified. The regulator will then pay the grant to the installer immediately, and you will be invoiced for the balance.
You can obtain a price for a heat pump and have it installed before April of next year, but you won’t know for sure whether you’ll get the one-time £5,000 subsidy until the initiative is officially launched.
What is a heat pump, exactly?
Heat pumps operate on electricity and take energy from the air or the earth in the same manner that a refrigerator does in reverse. They then transfer heat from one location to another in order to warm it up.
This is in contrast to gas and oil boilers, which function by boiling water and emit carbon into the atmosphere every time they are used. Boilers heat your house by circulating hot water via pipes to the numerous radiators.
Learn more in our detailed heat pump guide.