The new heat pump grant: What does it mean for you?

TTL’s Julia Waterlow examines the new government grant to encourage more householders to get off gas and oil and onto heat pumps – and explores who heat pumps are suitable for.

In April 2022 the government is introducing a new £5,000 grant towards the installation of heat pumps in its attempt to get homes that currently use gas or or oil onto a carbon-free form of heating.

The details of how to apply have yet to be published but the scheme will operate on a first come, first served basis with the government offering payments for 30,000 domestic heat pumps every year for three years. Householders will have to pay any costs that exceed the £5,000 grant.

A £6,000 grant will also be available to people installing a ground source heat pump because they cost more.  Heat pumps (and their installation) cost between £10,000 and £12,000 on average. The idea is that you will end up paying roughly the same amount as you would for a gas boiler. However in reality it is likely to cost more because of the need to upgrade insulation and possibly get larger radiators and a water tank.  Consequently heat pumps make most sense for those undertaking substantial home renovation.

The Renewable Heat Incentive

The new government scheme replaces the failed Green Homes Grant, which TTL discussed here. April 2022 will also see the end of the RHI (Renewable Heat Incentive) which is a payment still available for anyone fitting renewable energy systems.  If you can get a system installed before April next year the RHI might well be a better bet depending on your circumstances.  Note that the RHI also covers solar thermal panels, which may be well worth installing while you can.

Applying for the new grant
The detail has not been issued yet but basically households won’t apply for the grant. Instead their chosen heat pump installer will need to apply to Ofgem (the energy regulator) on their behalf.  Once an application has been reviewed, Ofgem will issue a voucher confirming the grant amount.  Once the work is completed satisfactorily, Ofgem will pay the installer directly and the householder will pay any remainder on the bill.  So although you could get an installation quote in advance of April 2022, you can’t know until then if you’ll definitely get a grant.

The verdict
Issuing grants for just 90,000 homes over three years to install a heat pump is a drop in the ocean when you consider an estimate 25 million homes in the UK use gas – and a further sizeable number of off-grid rural communities still use even more carbon-heavy oil (something that our local community energy company Ovesco is looking to address with its CommuniHeat initiative).

Whether the government will learn from the reported chaos of the failed Green Homes Grant to improve the efficiency of processing grant applications remains to be seen. But homeowners and their chosen installer will need to move fast to be among the first 30,000 to qualify for a grant come April. And if a grant application is unsuccessful, householders will need to consider if they have the resources to fund a heat pump themselves.

To learn from local people’s experiences of installing heat pumps, watch the Transition Town Lewes online Eco Open House event on home heating here.

What is a heat pump?
In simple terms, an air source heat pump works like a reverse fridge, extracting warmth from the outside air before concentrating it and transferring it indoors to provide central heating and hot water. The pumps look like a standard air-conditioning unit and need to be situated outside the home. Ground source heat pumps extract heat from the ground and are more expensive and need a sizeable garden to capture enough heat.

Are heat pumps worth it?
If you are restoring a house and putting in a whole new heating system along with a major insulation upgrade, installing a heat pump along with underfloor heating makes financial sense.  It may also be worthwhile if your old boiler needs replacing.  Much depends on how well insulated your house is and your energy needs.  Ripping out a modern gas boiler is unlikely to make financial sense but you may be keen to change to zero carbon heating.

Who installs heat pumps?
Although there are plenty of reputable companies out there, there are also a lot of sharks lured by the chance of quick profits, so be careful.  Local reputable installers are:

BSW (Burgess Hill) – 01444 831138 – www.bsw-bs.co.uk
DH Solar (Lewes) – 01273 655547 – www.dh-solarengineering.co.uk
A Greener Alternative (Shoreham) – 01273 455695 – www.agreeneralternative.co.uk
OHM Energy (Eastbourne) – 01323 739474 – ohmenergy.co.uk