Financial support for energy saving and generation

There are government schemes offering financial support for saving energy, using renewable sources and for generating green electricity.  The schemes have changed and will continue to change so it is always essential to find up to date information before committing to expenditure if you wish to take advantage of support.  For that reason no figures are given here for payment levels.

New funding for Air Source Heat Pumps (October 2020)

There is a new funding source available for households meeting certain conditions in our area to provide a free air source heat pump.  See this new page,  It will remain open while the funds last.

Green Homes Grant Scheme (new – August 2020)

The Green Homes Grant scheme was announced by Government in July 2020 and will commence in September; it is expected to run until March 2021. The Government published details in August, giving information on how the available £2 billion will fund improvements to over 600,000 homes in England.  The scheme will be open to homeowners and landlords.  Although the scheme is not open to tenants they can use the information available to suggest possible home improvements to their landlords and ask if they would be willing to apply for funding.

Vouchers for eligible home improvements

Vouchers worth up to £5,000 will be available for homeowners to cover two thirds of the costs of the improvement measures.  Households on low incomes receiving benefits (as defined here) can receive vouchers covering 100% of the cost of the improvements, up to a maximum of £10,000.  The vouchers will be used to pay for work only from tradespeople approved under the Government’s TrustMark scheme.  An exception is installers of heat pumps and solar thermal who need approval from the Microgeneration Certification Scheme (MCS) instead.

The eligible home improvements

The vouchers will support the installation of one or more of the following:-

  • solid wall, under-floor, cavity wall or roof insulation
  • air source or ground source heat pump (if loft and wall insulation present or are being installed)
  • solar thermal (if loft and wall insulation present or are being installed)
  • Biomass pellet boiler (if loft and wall insulation present or are being installed)

As well as installing one or more of the primary measures above householders can use their voucher for further energy saving measures. Support is available only up to the voucher value of the selected measure(s) in the list above and if still within the £5,000 or £10,000 allowable maximum. The options are one or more of the measures to improve energy efficiency  from the list below:

  • double or triple glazing/secondary glazing, when replacing single glazing
  • secondaty glazing (in addition to single glazing)
  • energy efficient replacement doors
  • hot water tank thermostats and insulation
  • heating controls

How will the vouchers be obtained?

From late September it will be possible to apply for a voucher for work that is appropriate for your home from the Simple Energy Advice website, a useful and comprehensive source of advice for home owners, tenants and landlords.  A quote from an accredited supplier will be required and once the proposed work is approved the voucher will be issued.

Although vouchers are not yet available it is possible to find out now what is recommended for your home, how much it will cost, who could do the work and how much could be saved on energy bills.  To do so go to the Simple Energy Advice Green Homes Grant web page that opened on 27th August,  The page has links to information on all of the measures that can be included in the grant scheme

After your eligibility is checked (living in England and status as home owner) you can enter your postcode and select your address for personalised advice, as the first step in obtaining your voucher.   If your home has an Energy Performance Certificate it will be used as the starting point to an easy process.  If not you will need to answer questions about the age, construction and floor area of your home.  All users will then need to answer questions about the number of occupants, their age groups, heating pattern and hot water use.

Once the Simple Energy Advice calculator has generated a list of personalised recommendations you can select from them to develop a plan. You will be able to start contacting tradespeople from the list of those operating in your area who provide the relevant services.  You will then be ready to apply for your voucher when the system goes live in late September.  That could be useful if there is a rush of applications.

The Feed-in Tariff

Important update – September 2019

The Feed-in Tariff scheme came to an end for new applicants on 31st March 2019.  There is information on this website on how it  has supported renewable electricity generation since 2010 such as on our page covering solar photovoltaics, with case studies.  Information here and on other pages will not be removed as it may be of interest to anyone who buys a house with a PV system that was installed between 2010 and 2019.

Payments are made to generators per kWh (unit of electricity) generated regardless of whether the electricity is used on site or is exported to the grid.  For householders the most relevant technology is Solar Photovoltaics (PV) but the same scheme also supports wind turbines, hydroelectricity, anaerobic digestion and micro combined heat and power (CHP).    Payments are made from an electricity company; most people choose the same company that supplies their electricity but it could be a different one.  In addition to the Feed-in Tariff an export tariff is also paid.  For domestic installations it is deemed that the electricity exported is half that which is generated so the export tariff payments are made on that basis.  Once payments have started they will be made for 20 years and will rise in line with inflation (RPI, the retail price index).

The Feed-in Tariff was designed to support the renewable energy industry in its early stages of development so payments fell in response to the number of installations and falling capital costs.  Official information on the FiT scheme can be found on a page of the ofgem website, but there is a very useful page on the Feed-in Tariff on the YouGen website.  The page gives more details of eligibility and how the scheme worked with a long list of FAQs. These include one on the consequences of moving home or buying a house with a PV system.  Up to date Feed-in Tariff rates can be found in the Ofgem tariff tables.

YouGen has an article on How the Feed-in-Tariff ending in April 2019 could affect you.  If you are already receiving FiT payments you will continue to do so.

The Smart Export Guarantee

The Smart Export Guarantee (SEG) is the replacement for the Feed-in Tariff.

It will be available for the usual renewable  technologies up to a capacity of 5 MW, so the scheme will apply to domestic customers, community groups and businesses.Exported power must be metered with a meter capable of recording on a half-hourly basis.All electricity suppliers with more than 150,000 domestic customers will need to provide at least one export tariff (which must be above zero at all times) with effect from 1st January 2020.
For more detailed information on the SEG the following links are useful.
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The Solar Trade Association is collating details of the SEG offers from energy providers so it is a useful source for finding the best prices for selling your surplus electricity.  As at August 2020 the page Understanding the Smart Export Guaranteelists the Top 6 fixed rate providers and the one variable rate provider that is pegged to the half hourly wholesale electricity price.  There is also a page with a complete SEG League Table..

SEG payments always will be much less than the cost of purchasing electricity for use in the home.   Without Feed-in Tariff payments it may be worth considering battery storage so as to make use of a higher proportion of the electricity generated.  The YouGen website page on Battery Storage for solar PV is a useful starting point but technologies and costs are changing rapidly so if you are considering battery storage you will need to seek out up to date information.  One example is the YouGen page Breakthrough for batteries? published in September 2019.

The Renewable Heat Incentive

The Renewable Heat Incentive (RHI) is a scheme to give financial incentives to householders, businesses and communities to adopt renewable heat technologies.  The Domestic RHI scheme for homes gives support for three technologies:-

Payments are linked to the heat demand met by the installation (no metering is required) and are made for 7 years with links to inflation (RPI).  There is a degression system similar to that mentioned above for the Feed-in Tariff under which payments will be reduced in line with the number of installations supported by RHI.  There is also a non-domestic RHI scheme that covers a wider range of technologies and does require metering of the heat supplied.  Payments are made for 20 years.

The YouGen website page on the Renewable Heat Incentive is a useful source of information on both the domestic and non-domestic versions of the scheme,  as is the September 2019 update RHI: things to watch out for.  Full details of the scheme, tariff rates and the application forms are available on ofgem pages for domestic RHI and non-domestic RHI.

According to the Yougen page Government announces plans for the future of green heat RHI will be phased out after 2022 but will be replaced by a new Clean Heat Grant, to help reduce the barrier of upfront costs for clean heating.  As with any such change those who are part way through receiving payments over many years will not be affected.

There is an important point regarding heat pumps and solar thermal systems regarding the new (2020) Green Homes Grant Scheme.  According to the Simple Energy Advice Green Homes Grant web page it will be possible to obtain a Green Open Homes Grant for these two technologies and then apply for Domestic RHI.  That sequence is essential.  The value of the Green Homes Grant Scheme voucher will be deducted from the RHI payments spread over the payment term. 

Energy Company Obligation

ECO is a Government programme to make houses in the UK more energy efficiency, also aiming to cut carbon emissions and reduce fuel poverty.   Grants may be available for new boilers or for insulation but only for householders in receipt of benefits. However the list of relevant benefits is a long one including Child Tax Credit and Working Tax Credit, so many people will be eligible.

It is not easy to get up to date information from Government websites.  The Ofgem site at www.ofgem.gov.uk/environmental-programmes/eco is not easy to use and may not tell you what you want to know.  There are some details on the websites of all of the major energy supply companies (those with more than 250,000 household customers) as they fund the scheme.

The independent consumer body Which? has a useful web page that introduces the ECO scheme at www.which.co.uk/reviews/home-grants/article/home-grants/energy-company-obligation-eco

According to the Simple Energy Advice Green Homes Grant web page it is possible to obtain both ECO funding and a Green Homes Grant for the same home, provided they are used for different energy improvements.

The Green Deal

Note that although the Green Deal still exists it will not be the best option for anybody once the Green Homes Grant Scheme (see above) begins operation in September 2020.

The Green Deal is a loan scheme to cover the costs of energy efficiency improvements that will result in lower energy bills with savings greater than the costs of the improvement measures (the ‘golden rule’).  Repayments are made via a charge on the home electricity bill at a fixed rate of interest.  If a householder moves the new owners or tenants will pay the charge as they will continue to benefit from lower bills.  There were many Green Deal Providers of insulation and a variety of renewable technologies that could be financed under the original version of the scheme but it collapsed in July 2015.  There is likely to be a lot of out of date information available on the Internet.

The assets of the Green Deal Finance Company that backed the loans under the original scheme were acquired by new owners in January 2017.  The company began financing loans again in May 2017, working with a small number of selected Green Deal Providers.  The initial focus is on replacement boilers but finance is also available for insulation, ground source heat pumps and air source heat pumps.  The new scheme is being ‘soft launched’ with minimal publicity.  Gradual expansion in terms of the number of providers and the range of technologies should ensure stability of a potentially very useful scheme.

Independent advice on how the new scheme works and its benefits can be found on the YouGen website page on the Green Deal. and on the Which? page on The Green Deal.  To find out more and to start the process of applying for a loan visit the website of the Green Deal Finance Company.

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