Government Increases Funding To Support Domestic Heat Pump Installations!

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Posted by Sam | 5th September 2017

From the 20th September (2017) installations of heat pump systems shall be eligible for increased Government funding from the ‘Renewable Heat Incentive’ scheme.

On the 30th August the Government published a statutory instrument to implement changes to the Renewable Heat Incentive scheme, as proposed in BEIS’s (The Department for Business, Energy & Industrial Strategy) consultation document ‘The Renewable Heat Incentive: A reformed and refocused scheme’ published 14th December 2016.

Subject to Parliamentary approval. The proposed reforms bring an increase in tariff rates for domestic air and ground source heat pump installations.

THAT’S GREAT NEWS!... BUT WHAT IS A HEAT PUMP? AND WHAT IS THE RENEWABLE HEAT INCENTIVE?

Air or Ground Source Heat Pumps are appliances which collect heat from a renewable energy source (i.e. air or ground), amplify the heat energy, and distribute it to a property via a central heating system.

As heat pump systems are extracting heat energy from a renewable energy source, they are a recognised low carbon technology, assisting the government to meet its 2050 carbon emission reduction targets under the Climate Change Act.

Administered by OFGEM, The Renewable Heat Incentive was introduced to incentivise homeowners to invest in low carbon heating appliances over conventional Co2 emitting gas or oil fired boilers. Under the scheme owners of installed systems would be eligible to receive tariff payments (paid quarterly) for seven years, to compensate the additional costs of installing a heat pump over a conventional boiler.

The tariff payments are based on the amount of ‘Green Energy’ which has been extracted by the heat pump…For instance for every 1kW of electricity consumed by a heat pump (Extracting the heat energy), 3-4kWs of thermal energy is provided by the system. Therefore 2-3kW of heat energy has been collected from a renewable energy source and a tariff payment shall be provided to reflect this.

Once the additional costs of installing a heat pump are recovered (From the R.H.I), the homeowner benefits from low carbon living and reduced heating bills (Over 10% compared to modern condensing boilers).

WHAT ARE THE PROPOSED CHANGES?

The Government have introduced tariff increases for both air and ground source heat pump systems.

Technology Type Existing R.H.I Tariff New R.H.I Tariff
Air source heat pump 7.63p/kWh 10.18p/kWh
Ground source heat pump 19.64p/kWh 19.86p/kWh

However as part of the scheme reform, ‘Heat Demand Limits’ have also been introduced. This refers the annual heat demand a property has in kWh’s, capping the tariff payments for only a proportion of this as detailed below.

Technology Type Annual Heat Demand Limit
Air source heat pump 20,000 kWh's
Ground source heat pump 30,000 kWh's

SO WHO BENEFITS FROM THIS TARIFF INCREASE?

If your property’s annual heat demand is below the ‘Heat demand limit’, you shall benefit from the tariff increase. The annual heat demand is established from an Energy Performance Certificate (E.P.C) produced for your home, using SAP calculations.

Generally we have found:-

  • Existing properties - Typically modern 3-4 bed houses benefitting from cavity wall insulation, double glazing and good loft insulation having heat demands of around 20,000 kWh’s.
  • Newbuild properties – 5-6 Bedroom Properties built with insulation levels required in the current Part L of the building regulations, shall have heating demands of around 20,000kWh’s.

Therefore homes similar in size to above (Or smaller) shall benefit from the latest tariff increases.

EXAMPLE OF HEAT PUMP INSTALLATION COSTS AND POTENTIAL R.H.I FUNDING

AIR SOURCE HEAT PUMP 

House Type 3 Bed, Cavity Wall & Loft Insulation, Double Glazed
Annual Heat Demand 16,250 kWh's
Annual Hot Water Demand 1,840 kWh's
Total Eligible Heat Demand 18,090 kWh's
Heat Pump System Size 14 Daikin Altherma & 300 Litre Cylinder
Seasonal Efficiency @45ºCFT  3.46 or 346% efficient
System Installation Cost £9,828.00 (Including V.A.T. @ 5%)
Annual RHI Income £1,301.00
TOTAL RHI INCOME @ 7 Yrs £9,107.00

THIS SOUNDS GOOD…SO WHATS THE NEXT STEP?

Speak to Griffiths…Griffiths are a MCS accredited installer of air and ground source heat pump systems.

If you are considering a heat pump we shall:-

  • Undertake a full room by room heat loss calculation for your property (Surveying existing properties or from drawings for newbuilds).
  • Specify a system which fully meets your building heating requirements (In line with latest MCS standards).
  • Provide you with a fully inclusive quotation for the systems installation.
  • Provide you with an estimated annual running cost of our recommended heat pump.
  • Provide you with an estimated payment from the Renewable Heat Incentive scheme, bespoke to your property.

CONTACT GRIFFITHS VIA OUR WEBSITE’S CONTACT PAGE OR CALL 01536 420666.

Griffiths are D1+ accredited installers of Daikin’s altherma range of air source heat pump systems.

Griffiths are a ‘Partner’ installer of Kensa’s ground source heat pump systems.