Green Homes Grants for Renewable Heating

Green Homes Grants for Renewable Heating

Between September 2020 and March 2021, you can apply for a government grant to cover two-thirds of the cost of installing a renewable heating system.

The Green Homes Grants scheme will give UK homeowners up to £5,000 (£10,000 for the lowest income households) towards the cost of installing an air source heat pump, ground source heat pump or a solar thermal heating system. The scheme has not yet been fully confirmed, but here is what we know about Green Homes Grants for renewable heating.

NOTE: This page was published 11th August 2020. We will update this page when more information is available.

What are Green Homes Grants?

The Green Homes Grants scheme is part of a £3 billion government investment into the country’s carbon reduction strategy. The UK needs to reach net-zero carbon emissions by 2050, but 20% of the country’s carbon comes from our heating systems.

Properties in the UK are well known as being some of the most poorly insulated in Europe. This makes our homes much harder to heat because there is a lot of heat lost to the outside air, so we use our heating for longer periods of time and at higher temperatures. The majority of UK properties use gas, oil or LPG boilers for heating and hot water, all of which emit carbon which is a greenhouse gas. In fact, 20% of the UK’s total carbon emissions come from our heating systems.

We need to make big changes to the way we heat our homes, but the majority of UK households do not have the cash to make those changes. That is why between September 2020 and March 2021, £2 billion of funding will be available to help over 600,000 households to improve their energy efficiency, simultaneously reducing heating costs and carbon emissions. The government has claimed that the Green Homes Grant could help families to save around £200 (or even up to £600) per year on their energy bills.

How will the Green Homes Grants scheme work?

Homeowners and landlords can apply for a primary grant to cover two-thirds of the cost (up to £5,000) of installing insulation or a renewable heating system.

Primary Green Homes Grants

  • Insulation: Solid wall, cavity wall, under-floor, loft, flat roof, room in roof, park home.
  • Low carbon heat: Air source heat pump, ground source heat pump, solar thermal
  • If you get a grant for insulation or renewable heating, you can also apply for a secondary grant for the below improvements. The secondary grant can not exceed the value of the primary grant.

    Secondary Green Homes Grants

  • Windows and doors: Double/triple glazing (where replacing single glazing), secondary glazing (in addition to single glazing), upgrading to energy efficient doors (where replacing doors installed prior to 2002). Visit Windows Guide for free no-obligation window replacement quotes.
  • Draught proofing.
  • Heating controls and insulation: appliance thermostats, hot water tank thermostats, hot water tank insulation, smart heating controls, zone controls, delayed start thermostat, thermostatic radiator valves.
  • For low income households, grants of up to £10,000 will be available.

    Which renewable heating systems are covered by Green Homes Grants?

    Air source heat pump

    An air source heat pump is installed outside the home. It looks like a large fan but it works like a refrigerator or air conditioner in reverse. The fan rotates to bring air inside the heat pump where it passes over an exchanger coil. The coil which contains a refrigerant fluid which boils and evaporates, transforming into vapour. The vapour is compressed to produce heat for a hot water cylinder.

    Air source heat pumps use a small amount of electricity to operate but are highly energy efficient (they produce 3x as much energy as they use). They also do not produce carbon emissions when operating which is much better for the environment. Air source heat pumps are easy to maintain and have a life expectancy of 20-25 years.

    Find out more about air source heat pumps.

    Is an air source heat pump right for you?

  • Air source heat pumps produce heat at a lower temperature which means the heat needs to be delivered via a larger surface area. This may mean you need to install larger radiators or underfloor heating.
  • Air source heat pumps will be able to extract heat from the air in temperatures as low as -15C, but they are less efficient in cold weather.
  • You will need to install a hot water cylinder in your home (which is compatible with the heat pump) to store hot water.
  • You need space outside the property for the heat pump to be installed.
  • For heat pumps to be effective, your home will need to be adequately insulated.
  • Ground source heat pump

    Ground source heat pumps can be installed to harness the natural heat from underground. Ground source heat pumps extract heat via tubes of fluid buried on your property. The fluid absorbs the heat from the ground so it can be used to heat your home and water.

    The tubes can either be installed straight down, deep underground or horizontally if you have enough outside space.

    Is a ground source heat pump right for you?

  • Ground source heat pumps produce heat at a lower temperature which means the heat needs to be delivered via a larger surface area. This may mean you need to install larger radiators or underfloor heating.
  • Ground source heat pumps will be able to extract heat from the ground in temperatures as low as -15C, but they are less efficient in cold weather.
  • You will need to install a hot water cylinder in your home (which is compatible with the heat pump) to store hot water.
  • You need lots of space outside the property for the pipes to be buried.
  • For heat pumps to be effective, your home will need to be adequately insulated.
  • Find out more about ground source heat pumps.

    Solar thermal

    Solar thermal panels are installed on the roof of the property where they are exposed to sunlight. The panels include tubes of fluid which absorb the sun’s energy so it can be converted into heat for your water supply. The heated water is then stored in a cylinder so it can be used in taps, showers and wet central heating systems.

    Solar thermal panels can reduce your carbon emissions and heating costs. They are very low maintenance and can last for 20 and 25 years.

    Are solar thermal panels right for you?

  • The sun isn’t out all the time which means that during the night and on particularly cloudy days you will need to use an alternative heating system such as a boiler, a heat pump or an electric heating system.
  • A solar PV system can take up a large amount of space on the roof, depending on the system size needed to meet demand.
  • You will need to install a hot water cylinder which is compatible with solar thermal.
  • Find out more about solar thermal panels.

    NOTE: Only renewable heating systems which have been installed by a Microgeneration Certification Scheme (MCS) certified installer will be eligible for a Green Homes Grant.

    How much could a renewable heating system cost?

    The cost of installing a renewable heating system will vary depending on several factors including the complexity of the installation, any extra work required such as new hot water cylinders or pipework, the manufacturer of the heating system and the installer’s labour costs. The table below gives some approximate costs of installing each renewable heating system, as well as how the Green Homes Grant could reduce the cost, but these costs have been provided as a rough guide only.

    Renewable Heating System Average Cost of Installation (3 bedroom home) Potential Green Homes Grant (covering two-thirds of the cost up to £5,000) Potential Remaining Cost for Homeowner to Cover
    Air source heat pump £4,000 – £10,000 £2,666-£5,000 £1,334-£5,000
    Ground source heat pump £8,000-£12,000 £5,000 £3,000-£7,000
    Solar thermal panels £3,000-£4,000 £2,000-£2,666 £1,000-£1,334

    Renewable Heat Incentive (RHI)

    Another benefit of installing a renewable heating system is that you may be eligible for the Renewable Heat Incentive (RHI) scheme.

    The Renewable Heat Incentive pays homeowners who have invested in renewable technologies for the energy generated by the system. You would receive payments on a quarterly basis over 7 years which could potentially see you earn back even more of the initial costs. It’s worth noting that the RHI is closing to new applications in March 2021, so you only have until that time to take advantage of both the Green Homes Grants and RHI scheme.

    Who is eligible for a Green Homes Grant for renewable heating?

    To apply to the general Green Homes Grants scheme for funding up to £5,000, the following properties are eligible:

  • All owner-occupied homes (including long-leaseholders, shared ownership)
  • Landlords of private rented sector domestic properties
  • Landlords of social sector domestic properties (including LA owned homes)
  • Park home owners (for residential sites including Gypsy and Traveller sites)
  • New-build properties (domestic and non-domestic) are not eligible.
  • To qualify for the Green Home Grants low-income scheme (which offers grants of up to £10,000 to only owner-occupied properties and park homes) you must be in receipt of at least one of the following benefits:

  • Income based Jobseekers allowance (JSA)
  • Income based Employment & Support Allowance (ESA)
  • Income Support (IS)
  • Pension Guarantee Credit
  • Working Tax Credit (WTC)
  • Child Tax Credits (CTC)
  • Universal Credit (UC)
  • Disability Living Allowance (DLA)
  • Personal Independence Payment (PIP)
  • Attendance Allowance
  • Carer’s Allowance
  • Severe Disablement Allowance
  • Industrial Injuries Disablement Benefit
  • Contribution based Jobseekers allowance (JSA)
  • Contribution based Employment & Support Allowance (ESA)
  • Housing benefit
  • How to apply for a Green Homes Grant

    The application process has not yet been confirmed, but it will be an online process starting in September 2020 and lasting until the end of March 2021. Only renewable heating installers who are certified by the MCS and/or TrustMark approved will be able to complete work under the Green Homes Grants scheme.

    Get quotes for a renewable heating system

    When you have a quote for your renewable heating system, you will know how much of the cost of the installation you will need to cover (if any) and can work with the installer to apply for the Green Homes Grant.

    To get free no-obligation quotes for an air source or ground source heat pump, complete our enquiry form today. We will find you up to 3 quotes from MCS certified heat pump installers in your area.

    Alternatively, visit Solar Guide for free, no-obligation solar thermal quotes.


    Get FREE Quotes