Government planning to replace RHI with Clean Heat Grant

The UK Government has outlined its intentions to replace the Renewable Heat Incentive (RHI) with a new Clean Heat Grant that will aim to help households and businesses decarbonise through technology and push the nation towards its net-zero target for 2050.


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Government planning to replace RHI with Clean Heat Grant

The RHI was put in place by the Government as a means to convert 12% of UK homes to renewable heat by the end of 2020

The Government announced on Tuesday (28 April) that the non-domestic RHI scheme would close for new applicants from April 2021. As promised in the Budget, however, the RHI for households and organisations has been extended to March 2022.

A consultation had been launched to formalise the replacement scheme for the RHI. The Government is proposing a Clean Heat Grant that would commence in 2022, offering funding support of up to £4,000 for each household or business that integrates heating technologies such as heat pumps. An eligible list of technologies applicable for funding support will also be outlined.

The Government is also proposing a new Green Gas Support Scheme to increase the percentage of biomethane available on the gas grid. However, the Government is no longer considering banning biomass boilers in urban areas from securing financial grants. There had been some concerns that the systems were worsening air pollution.

The Government intends to use the consultation to outline the support mechanisms required by business to decarbonise the UK’s commercial and domestic building stock, which accounts for approximately 40% of the UK’s carbon emissions.

The RHI was put in place by the Government as a means to convert 12% of UK homes to renewable heat by the end of 2020. Current trajectories suggest it will reach 8-10%. While Government figures claim that the RHI has delivered payments of £2,800 annually to those signed up, all while saving 5.2 tonnes of carbon annually, it has been criticised for failing to provide financial value. In 2018, the Public Accounts Committee (PAC) concluded that the RHI had failed to provide value for money for the £23bn it was set to cost taxpayers.

The Committee on Climate Change has suggested that the UK would require 15 million homes to be fitted with heat pumps or hybrid heat pumps by 2035.

Last year, the Science and Technology Committee’s ‘Clean Growth: Technologies for meeting the UK’s emissions reduction targets’ report outlined a lack of replacements for the RHI as one of the 10 major shortfalls of Government efforts to date to reach net-zero emissions by 2050.

Commenting on the consultation, Frank Gordon, head of policy at the REA said: “Overall, these are mixed announcements for the renewable heat industry. On the one hand, they have provided much-welcomed clarity on the completion of projects currently underway, the prospect of new projects and the Government’s commitment to green gas. This is a step in the right direction for the sector, providing the certainty needed to increase investor confidence and deploy much needed renewable heat technology.

“On the other hand, we were disappointed by the lack of extension for new Non-Domestic RHI projects and the implications the cap on the future grant scheme will have. Both of which could result in business’s being unable to finish their projects or continue to operate at a time when the industry needs to be bolstered to achieve our legally binding Net-Zero targets.”

Matt Mace

© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.

Comments (3)

  1. Keiron Shatwell says:

    4K would barely cover the cost of replacing the radiators in my house, let alone re-plumbing the near 1/3rd of a kilometre of piping that would need to be undertaken for me to switch to a Heat Pump based system. This is a necessity due to the simple fact that HP systems do not reach the same water temperature as a wet boiler. My system is optimised for 65C water in the radiators so will never heat my home at the ~45C from a HP system.

    It won’t go far in insulating homes to make them more effective at keeping heat in, another requirement for most HP systems, or installing new underfloor heating which is a far more efficient and effective heat system for HP.

    What we really need is research and development into a properly designed, effective, efficient and cost effective replacement for the wet boiler so that when I have to replace my oil fired boiler I can simply swap it out for a new, thermally efficient renewable system.

  2. Paul Tanner says:

    KEIRON SHATWELL’s comment speaks of piping and high cost. Presumably he has microbore. Installers are telling me that I should upgrade older rads but my 15mm piping is OK as is. The grant would still be important to me but mainly because of retro-fit labour costs and the installer’s need to make a profit.

  3. Keiron Shatwell says:

    @Paul – yes I do speak of piping and cost as that is what most households in the UK will face to retro-fit our heating systems especially if they are to be effective and efficient. If you have 15mm pipes then lucky you as most modern, ie less than 20 years old, will have microbore piping and slimline radiators as that is what builders fitted.

    I’ve no problem with renewable or clean alternatives to my A rated Oil Fired system but everyone is so focussed on Air Source Heat Pumps that no one is seriously looking at the other options or how it will even work to try to fit ASHP into every home and make it properly effective and efficient.

    When people who have had ASHP fitted tell me they spend 3x as much to heat their home and it is never properly warm or it is damp, or people reinstate their oil fired boilers as it is actually more efficient than an ASHP I have to ask "what is the bloody point" and is this "dash for Heat Pumps" actually making the situation worse.

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