Householders could get up to £1,250 of government funding to help towards the cost of installing renewable heating systems such as biomass boilers, air and ground source heat pumps and solar thermal panels.
The Department of Energy and Climate Change has announced that the £15 million 'Renewable Heat Premium Payment' (RHPP) scheme will be open for applications on 1 August this year until March next year, which it is estimated will support up to 25,000 installations.

The scheme is mostly aimed at the 4 million households in Great Britain not heated by mains gas, who have to rely on higher carbon forms of heating which also tend to be more expensive than gas, such as heating oil and electric fires to keep warm.

Participants will be asked to provide detailed feedback on their experience through a set of surveys. The Government will also provide, for a significant sample of participants, additional meters for their heating equipment. This will provide more detailed information so DECC can compare manufacturers' and installers' claims about performance with real data on energy use.

Climate Change Minister Greg Barker said: 'Today starts a new era in home heating because we're making it more economical for people to go green by providing discounts off the cost of eco heaters. This should be great news for people who are reliant on expensive oil or electric heating as the Premium Payment scheme is really aimed at them. Getting money off an eco heater will not just cut carbon emissions, it will also help create a market in developing, selling and installing kit like solar thermal panels or heat pumps.'

Householders need to ensure they have basic energy efficiency measures in place before applying on 1 August and grants will be available on a first come first served basis. Grants for the following technologies will be available:

• Ground source heat pump - £1250 grant (for homes without mains gas heating)
• Biomass boiler - £950 grant (for homes without mains gas heating)
• Air source heat pump - £850 grant (for homes without mains gas heating)
• Solar thermal hot water panels - £300 grant (available to all households regardless of the type of heating system used)

£3m of the £15m will be set aside for registered social landlords to improve their housing stock. Details of how to apply for these funds will be announced at a later date.

Philip Sellwood, chief executive, Energy Saving Trust, said: 'Our field trials have shown high levels of householder satisfaction with heat technologies. When people have the kit installed in their homes they really see the benefit. Of course there is still more to be learnt about how to get the most out of the technologies - but the more they're out there in people's homes, the more they become part of daily life. Without a doubt, the main barrier that prevents people from taking the plunge is the up-front capital cost. This is a great start in overcoming this obstacle.'

The Renewable Heat Incentive (RHI) will be open for applications from 30 September for financial assistance for industry, business and communities, and will be administered by Ofgem E-Serve.

BEAMA Domestic Heat Pump Association director Kelly Butler commented: 'The Renewable Heat Premium Payment (RHPP) scheme will take the industry one step closer to its goal of one million heat pumps installed by 2020. I’m pleased that the scheme is running to the original timescales, with vouchers for payment issued from 1 August, so that installers and their customers have a full heating season to specify and install measures.

'As well as boosting the domestic uptake of heat pump technologies in the domestic sector, the RHPP also provides an incentive to installers to register with the Microgeneration Certification Scheme (MCS), which will give the industry further credibility. We are happy to work with Government to deliver additional monitoring of RHPP to increase the knowledge base of how renewable heat technologies work in real homes and will seek to feedback any learnings to manufacturers, specifiers and installers.'

Director of renewables, Simon Allan, at Plumb Center said: 'We are pleased that the government has pledged £15 million for the generation of renewable heat. Up to 25,000 installations will be generated as a result of this incentive which is great news for our customers. Plus, it starts on 1 August which is traditionally a quieter time for installers so it will bring them a much needed boost at a time when businesses across the board are being affected by the economic downturn.

'The solar thermal incentive of £300 is particularly welcome as it is applicable to any home and it offers about a 10% saving on the cost of a system. It should, therefore, achieve payback in about 10 years. If it also qualifies for the Renewable Heat Incentive due to be introduced in 2012, by meeting the eligibility criteria, homeowners should really start noticing the financial benefits.'

Chris Davis, business development director for Dimplex Renewables, said: 'The introduction of the RHPP is a positive and important step towards supporting the takup of renewable heating in the UK domestic sector.” However there are unanswered questions, he continued: “A one-off payment under the RHPP is obviously a key step towards helping householders meet the up-front capital and installation costs of renewable heating systems. But until more is known about the eligibility criteria for the full domestic Renewable Heat Incentive (RHI) scheme, due to start in October 2012, it’s uncertain whether the RHPP will give householders the confidence to opt for renewable heating, without the certainty of ongoing financial support.'

Supporting the RHPP, Which? energy expert Sylvia Baron said: 'If your house is not connected to the mains gas grid and you are using traditionally expensive ways to heat your home, like heating oil or electric heaters, then this might benefit you.'

Simon Holden, co-founder of Euroheat said: 'The focus of the Premium Payment will be homeowners currently relying on off-gas means of heating, such as oil and electricity, which can prove extremely expensive. Wood biomass is particularly suited to this group who are often situated in rural locations and if they have been using oil, will already have space set aside for the tank and so used to the size of equipment that goes with a biomass boiler. Countryside customers usually have easier access to managed woodland; some may even have this on their land making wood biomass a very cheap option.'

He continued: 'Solar thermal is available to any household, but in order for your customers to access biomass or heat pump funding, end-users will need to ensure they have basic energy efficiency measures in place. Priority will be given to the 5.5 million households in Britain not heated by mains gas. If you are already a qualified biomass heating installer make sure your off-gas customers are aware of the RHI Premium Payment.'

Gordon Miller, co-founder and sustainability and communications director of Sustain Worldwide, an advocacy membership organisation, has welcomed the initiative but said it could have a 'limited impact on a national scale'. Mr Miller added: 'In truth, it's a stopgap before the renewal heat incentive scheme and the green deal are introduced in 2012. But for anyone considering installing solar thermal before next winter, why not grab what is effectively a £300 discount on the average £3,000 to £5,000 purchase and installation cost.'

NAPIT has urged householders taking part in the scheme to ensure they have MCS registered installers, David Cowburn managing director of standards has warned of rogue tradesmen when installations are undertaken, which he said is sometimes carried out 'without regard for safety standards or building regulations, not to mention consumer safety, the results can be nothing short of devastating.' He added, 'NAPIT pro-actively campaign to stamp out these charlatans who discredit and undermine the years of hard work and training of competent registered installers.'

Eleanor Fox, Vokèra’s marketing director said: “What is great about the RHPP is that so far the scheme seems to be very simple. While Vokèra doesn’t feel the premium payments are enough to dramatically increase uptake of renewables, they will certainly help it demonstrates to the end user that the Government is backing renewable technologies.

The announcement from the DECC confirmed that the scheme will not start until 1 August, a delay from the expected date of 1 July. Ms Fox commented: 'While this is a disappointment at least it is finally here. Installers who have not started need to get prepared. Vokèra’s advice to installers is to get MCS accredited, finish off any necessary training and market their services to potential customers alongside their core business.' While Vokèra has been, and remains, very positive about the scheme, the manufacturer is disappointed that the criteria for the RHI tariff is still not clear. 'This could be a stumbling block to initial uptake, as homeowners who receive the RHPP are not guaranteed the on-going RHI tariffs which are expected to launch in October 2012.

'Vokèra is therefore urging the Government to announce the RHI tariff criteria as soon as possible. The ideal situation would be that the criteria is the same for the tariff as it is for the RHI Premium Payment, so people are assured of this continued support. Alternatively, the Government should allow homeowners who do not meet the criteria a chance to implement any necessary changes and reapply.'

People who have installed kit under the Premium Payment scheme could receive support through the Renewable Heat Incentive, providing they meet the eligibility criteria of the scheme when it is introduced.

• For information about the RHPP scheme, that will be run by the Energy Saving Trust, householders can call 0800 512 012 or visit http://www.energysavingtrust.org.uk/Generate-your-own-energy/Sell-your-own-energy/Renewable-Heat-Premium-Payment

• For information about the RHI, and to find out details ahead of being able to apply in September contact Ofgem E-Serve from on 0845 200 2122 or by visiting http://www.ofgem.gov.uk/e-serve/RHI/Pages/RHI.aspx