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Incentives

Various grants, incentives and tax breaks are available for the installation of heat pumps and solar systems. 

 

 

 

In order to obtain these incentives an MCS accredited installer such as Geowarmth Heat Pumps must be used.  To find out more about the various benefits click on the links below and you will be redirected to the relevant organisation.

 

 

 

Renewable Heat Incentive 

   

The Renewable Heat Incentive (RHI) is expected to commence in April 2011.  It will provide an annual cash back payment for renewable heating systems such as heat pumps and solar systems installed after 15 July 2009.  It will apply to home owners, private landlords, housing associations, social landlords, local authority buildings, community organisations and businesses.

 

The RHI has been calculated by the government to provide a 12% return on investment on heat pump installations and a 6% return on solar thermal systems.  Payments will be made annually for between 18 and 23 years.

 

The value of the payment will depend on the technology installed and the size of installation.  Very large commercial schemes (> 350kW) will have meters to measure the amount of kilowatthours (kWh) of heat produced.  All other schemes will be based on the "deemed” number of kWh: the reasonable annual heat requirement that the installation is intended to serve.

 

Some examples of the anticipated annual cashback are as follows:

 

Technology Output Typical building £ per annum Number of years

Ground source 8kW Medium domestic 1,120 23

Ground source 14kW Large domestic 1,960 23

Ground source 30kW 600m2 building 4,200 23

Ground source 100kW 1,200m2 building 11,000 20

 

Air source 8kW Medium domestic 1,200   18

Air source     14kW      Large domestic 2,100 18

Air source 30kW 600m2 building 4,500 18

Air source  100kW 1,200m2 building 4,000 20

 

Solar thermal 4m2 Medium domestic 285 20

Solar thermal 6m2 Large domestic 401 20    

   

 

Feed In Tariff  

   
The Feed in Tariff commenced in April 2010.  It means solar PV systems can be worth over 50p per kWh.  There are 3 components to this.  Firstly there is an annual cash back payment of up to 41.3p (or 36.1p for new builds) for each kWh of electricity produced.  Secondly there is a saving by not buying electricity from your normal supplier, typically 10-14p per kWh.  Thirdly any electricity generated and sold back to the grid earns 3p per kWh.  For a 2kW domestic installation this could all be worth around £900 per year.    

 

Householder grants in England and Wales

 

 

These grants ceased on 24 May 2010

 

 

 

Householder grants in Scotland

 

 

In Scotland grants are available on air source and ground source heat pumps and solar thermal systems up to a maximum of £4,000 or 30% of the cost, per technology, for installation in a residential property.  This scheme closes to new applications on 23 July 2010.

 

 

 

Public sector and not for profit organisation grants

 

 

The DTi Low Carbon Buildings Programme Phase 2 Extended closed for new applications on 24 May 2010.

 

 

 

Community Sustainable Energy grant scheme

   

The CSEP scheme, with support from the Big Lottery Fund, means community groups can apply for grants of up to 50% to install renewable energy systems in buildings such as village halls, visitor centres or schools. Funding to improve building insulation is also available. 

   

 

Businesses and property developer grants

 

 

Check with your local authority, Business Link, Regional Development Agency what other local or regional incentives may be available.

 

 

      

Renewable Energy Finance

   

Geowarmth can provide access to finance facilities for the installation of air source heat pumps, ground source heat pumps and solar thermal hot water systems.  Through our partnership with Dimplex we can offer an alternative to cash purchase via an instalment option, which not only can reduce the potential barrier of the initial capital outlay but can assist in matching cost against the actual benefit derived from the renwable energy and deliver tax and VAT efficiences.

Contact us for further information. 

   

 

Interest free loans for businesses

 

 

Businesses may be eligible for a Carbon Trust unsecured, interest free loan of up to £100,000 for installing a renewable energy system such as a heat pump, solar thermal or solar PV system.

 

 

 

Enhanced capital allowances

 

 

A ground source heat pump, air source heat pump, solar thermal hot water or solar PV system can qualify for enhanced capital allowances allowing businesses to write off the full cost against tax in the year of installation.

 

 

 

VAT

 

 

Heat pumps and solar systems are defined as energy saving devices by HMRC and a reduced rate of VAT of 5% can be charged by us where the installation is in a residential dwelling.  The proportion of the project relating to the underfloor heating or radiators will be standard rated.  If the renewable energy system is installed during the course of construction of a new dwelling or the property is listed, our entire supply may be zero rated.  If you require more information obtain downloads of VAT notices 708/6 and 708.

 

 

 

Geowarmth have produced a comprehensive guide to all the above. Please contact us  to request a copy.

 

 

 

Geowarmth Heat Pumps Limited, 6 Back Goldspink Lane, Sandyford, Newcastle upon Tyne, NE2 1NU

t: 0191 261 7751 f: 0191 261 6291 More info

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