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RECC welcomes Government plans for Clean Heat Grants

Posted: 28 April, 2020. Written by Virginia Graham

RECC has welcomed Government's announcement today that it plans to introduce a grant scheme to support consumers who install renewable heating systems.

The scheme is due to follow on directly from the Domestic RHI when it closes on 31 March 2022. These Clean Heat Grants will complement £9bn of measures already announced to improve energy efficiency and support the move to low carbon heating.

Virginia Graham, RECC Chief Executive, said today: "It is excellent news that Government is consulting on this scheme in good time so that there can be a smooth transition after the end of the RHI. We welcome the introduction of capital grants and look forward to working closely with Government to ensure that the scheme works well for both installers and consumers."

The grants are intended to offset some of the upfront cost of installing heat pumps and, in limited circumstances, biomass boilers, in homes and in small non-domestic buildings. Providing clean space and water heating in this way will replace fossil fuel systems. Around 1.3 million homes are heated by coal or oil in GB, as well as 0.2 million by LPG. These homes will be the initial targets for the grants, rather than the 20 million homes heated by natural gas.

Government hopes that capital grants, paid in two stages through a system of vouchers, will contribute to its carbon reduction targets, stimulate the clean heat supply chain and reduce consumer barriers to take-up. It sees grants, at a flat-rate of £4k, as a solution that will: directly address upfront costs, widen access to the scheme, have a better distributional impact, remove the risk of overcompensation, be simple to administer and be easy for consumers to understand.

Government is proposing a 45kW capacity cap for systems supported. However, even for air source heat pumps with a grant of £4k, consumers will still need to find a further £6k, on average, either through finance or from their own means.

Government is seeking views on the way the grants are administered. Responses must be submitted by 7 July. RECC will be responding robustly and will be canvassing members' views in advance. You can read the full consultation here