Financial Support and Grants

For those in search of financial assistance when it comes to installing and using an air source heat pump, the primary solution in place is the “Renewable Heat Incentive” scheme, or RHI. Designed to reduce the cost of an air source heat pump system, and other solutions for renewable energy production, the RHI pays a set tariff per Kw of renewable energy generated.

Similar to a kind of air source heat pump tax credit, the RHI payment is based on the heat demand figure taken from the EPC, but applicants will require a “Green Deal Report” to be eligible.

Do Air Source Heat Pump Grants Cover the Initial Outlay?

The Energy Savings Trust suggests that the air source heat pump tax credit, or RHI could pay around £1,055 to £1,420 a year, over a period of seven years – enough to cover the outlay of your pump installation. However, these instalments are paid over a long-term period, so you will need to manage the initial cost upfront.

About the Renewable Heat Incentive

The Renewable Heat Incentive was set up to encourage the uptake of sustainable heat technologies among communities, households, and businesses. The air source heat pump tax credit is the first of its kind in the world, and it is expected to contribute to the 2020 goal of 12% of UK heating coming from renewable sources.
The Domestic RHI was first launched on the 9th of April, 2014. These air source heat pump grants provide payment to the owners of renewable heating systems for seven years across England, Wales, and Scotland. Decisions regarding tariffs and regulations are made by the UK Government Department of Energy and Climate Change.

Who Can Apply, and What Can You Earn?

For those who choose to install an air source heat pump, the amount you receive from the RHI will depend on various factors, including the technology that is installed, the tariffs currently available for those technology, and metering. The Department of Energy and Climate change has an RHI payment calculator to help.
The people who can apply for RHI air source heat pump grants include:

  • Private landlords, owner-occupiers, registered providers of social housing (if they meet eligibility criteria).
  • Single domestic dwellings
  • Self-build projects (RHI isn’t available to new-build properties)

Anyone applying for RHI support must apply within a year of the system being installed.

How Can I Apply for RHI?

RHI support for an air source heat pump can be applied for through Ofgem’s website. Provided that you have the correct information and there is no need for a manual review, your decision could be immediate. You can check on the Ofgem website to determine whether your application may need a manual review.

To apply, you’ll need:

  • Your bank details;
  • Energy performance certificate number;
  • MCS installation certificate number for the heating system.

Elements that Might Affect your Financial Support

Crucially, once you receive domestic RHI payments, the rate given can change annually. Prior to the amendments introduced in March 2016, the rate changed in accordance with the RPI (Retail Price Index). Any applications from this point will be adjusted per the CPI instead (Consumer Price Index).

If you have received public funds or government grants such as the Renewable Heat Premium Payment, then this amount will be considered when calculating your RHI payments.
The current RHI scheme uses a system of “degression” to manage the budget available for domestic RHI. The tariff may be adjusted from time to time for new applicants if the total amount being claimed for that technology reaches a certain level. Degression does not affect anyone already claiming domestic RHI for their air source heat pump.