Government has today revealed a £15 million scheme to encourage households across the UK to go green. The ‘Renewable Heat Premium’, which will run from August 1 this year until March 2012, will support up to 25,000 installations countrywide.

From the beginning of next month, homeowners will be given the opportunity to take advantage of up to £1,250 of Government funding, available to help towards the cost of installing renewable heating systems such as solar thermal panels. 

Although the scheme will be available across the country, focus will be placed on the four million households not heated by mains gas, which are forced to rely on higher carbon forms of heating which also tend to come at a higher cost. This rule will not apply to solar thermal technology, however.

Participants will be asked to give detailed feedback on their experience through a set of surveys, providing Government with a better understanding of the need for renewable technologies. A select group will also be given additional meters for their heating equipment, allowing the DECC to 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.”

From August 1, UK residents will be eligible for £300 grants to help pay for the installation of solar thermal hot water panels, which will be available to households regardless of the type of heating system they already have. A total of £3m will be set aside for registered social landlords to improve their housing stock. Other renewable heat technologies can be installed using grants of up to £1,250.

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.”

Cathy Debenham, Founder of YouGen said, “It's great news to hear that there's going to be research and monitoring into how people use renewable heat, and how well it works in practice. I thoroughly applaud that aspect of the scheme.

“However, the government still hasn't announced what rates will be available for the domestic renewable heat incentive, and what the eligibility criteria are. Without this information, investment in renewable heat is still prohibitively expensive for most people.

“In my conversations with installers about the subject, most have dismissed the renewable heat payments as too small to make any difference. A change in the price of oil is much more likely to get their phones ringing.

“I realise that this is a difficult chicken and egg situation. Without the findings of their research, the eventual Renewable Heat Incentive probably won't be as effective in incentivising uptake of solar thermal, biomass boilers and heat pumps. But unless people know the long term financial implications of investment, these relatively small grants aren’t likely to be enough to persuade them to take an expensive gamble.”

Those who have taken advantage of the Premium Payment scheme could also receive support through the Renewable Heat Incentive, providing they meet the eligibility criteria of the scheme when it is introduced. The Renewable Heat Incentive (RHI) will be open for applications from September 30 and administered by Ofgem E-Serve.

The Premium Payment scheme will be run by the Energy Saving Trust. Householders will need to ensure they have basic energy efficiency measures in place before applying on August 1 and grants will be available on a first-come, first-served basis.