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Premium Payment Scheme Grants for Renewable Heating

Greg Barker, minister for climate change, has revealed a new scheme, the “Premium Payment Scheme”, to provide grants to home owners to install renewable heat technologies. The grants will be available in respect of four technologies, biomass boilers, ground source heat pumps, air source heat pumps and solar thermal hot water panels. The scheme has a fund of £15m and is intended to support as many as 25,000 installations.

The scheme, a prelude to the long awaited renewable heat incentive, sister scheme to the feed in tariff, is aimed mostly at homes which are off the gas grid and which have to rely on oil fired heating or electric heating. It is estimated this accounts for up to 4 million homes. As a result of the expensive fuels these homes have the highest heating bills.

How Much Will Be Made Available for Renewable Heat Premium Payments?

Grants of up to £1,250 will be made available on a first come, first served basis. The grants available for each renewable heat technology will be as follows:

The scheme will run from 01 August 2011 until March 2012. It will be administered by the Energy Saving Trust.

What do the Renewable Heat Technologies Cost?

A biomass boiler will cost from £6,500 for a basic model to £12,500 for a top of the range boiler, so the grant being offered represents around 10% of the price. A ground source heat pump will start from £9,000 with air source heat pumps starting from £6,000. A typical solar thermal heating system will typically be around £4,800.

Although the premium payment scheme is a positive step, critics argue that it does not go far enough. The balance of the installation cost is still very high and there is no guarantee that participants will be eligible for the renewable heat incentive, the scheme which makes renewable heat technologies economically viable. Take up would almost certainly be higher if home owners new they were to be eligible for the RHI following commencement in autumn 2012.

What is the Purpose of the Premium Payment Scheme?

The scheme is intended to help the Department of Energy and Climate Change to better understand renewable heat technologies and so to decide which technologies to support via the renewable heat incentive. Participants will be expected, in return for their grant, to complete detailed surveys about their experiences with the various technologies. This will be compared with the manufacturers’ and installers’ claims.

By incentivising certain people to install renewable heat technologies, it is also hoped that others will see the technologies as more accessible and will be more likely to purchase them themselves when the renewable heat incentive begins.

Climate change minister Greg Barker 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, chief executive of the Energy Saving Trust, says early field trials have shown high levels of householder satisfaction. “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 homes, 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.”

1 Comment to Premium Payment Scheme Grants for Renewable Heating

  1. October 3, 2011 at 12:06 pm | Permalink

    This has now been ‘delayed’ but not withdrawn apparantly.

    See the following article:


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