Government Incentives

Government initiatives and legislation are designed to support the installation of efficient heating systems and sustainable technologies.

Renewable Heat Incentive

In April 2014, the Domestic Renewable Heat Incentive (RHI) was introduced by the Government to encourage householders to consider using renewable energy to heat their homes as part of an ongoing strategy to reduce greenhouse gas emissions and climate change.

Through the Domestic RHI, households who install renewable heating systems, including Grant’s air source heat pumps, solar thermal systems and biomass boilers, can receive quarterly payments for seven years subject to meeting and adhering to the Scheme’s rules. Payments are set at a rate per kilowatt hour and, while the tariff rates are reviewed every quarter, successful applicants to the RHI will remain on the same tariff that is in place when they join the Scheme.

In order to apply for the RHI (via the Ofgem website), a Microgeneration Certification Scheme (MCS) certificate is required for the renewable product’s installation and a domestic Energy Performance Certificate (EPC) must be provided for the property. For the MCS certificate, both the product being installed and the engineer completing the installation must be MCS Certified and Accredited. The chosen product must also meet the relevant EN standards (please refer to the Product Eligibility List for more information).

Full details regarding the Domestic RHI Scheme, including the current tariff rates, can be found on the Ofgem website.

ErP Directive

ErP stands for the Energy related Products Directive, an EU initiative designed to achieve reductions in energy usage, emissions levels, and other environmental issues such as noise and the use of refrigerants. The Directive, which incorporates the requirement for energy labelling on space and water heaters, also aims to help consumers to identify the most energy efficient products on the market.

In brief, the ErP Directive details energy efficiency requirements that appliances must meet and preferably exceed. The Directive also requires manufacturers to apply product fiches (data table) and compliant energy labels within their product packaging, labels which must detail a product’s energy efficiency rating.

While it is the manufacturer’s responsibility to issue their individual products with the required labels, installers need to calculate and issue an efficiency label for the entire heating system. Whether installing a new heating system or installing new boilers, controls or renewables into an existing system, it is the installer’s responsibility to calculate and issue a package label for the efficiency of the complete system.

From 26th September 2018, new legislation under the ErP Directive comes into effect setting maximum levels for NOx emissions targets for oil fired boilers of 120mg/kWh. All of Grant's oil boilers are low NOx ready. 

For further information regarding the ErP Directive, please click here.

ECO Design Directive

The ECO Design Directive forms part of the ErP regulations. The ECO Design Directive requires manufacturers to decrease the energy consumption of their products including space heaters, combination heaters, water heaters and thermal stores. For example, under the ECO Design Directive, it is a mandatory requirement for heating systems to be fitted with High Efficiency pumps. By complying with the ECO Design Directive products will consequently adhere to the ErP Directive requirements.

For further information regarding the ECO Design Directive, please click here.

Reduced VAT

The installation of certain energy-saving materials or heating equipment may be eligible for a reduced rate of VAT - 5% compared to the standard VAT rate of 20%. The reduced rate of 5% VAT can apply to the installation of certain energy-saving materials in, or within the curtilage of, residential accommodation. Such energy-saving materials can include air source heat pumps and wood fuelled boilers through to draught stripping and insulation. These energy-saving materials are only eligible for the reduced rate of VAT if they are installed for use within specified types of residential accommodation.

When fitting energy-saving materials with other works (goods and/or services), while the installation of the energy-saving materials will be reduced rate, the VAT liability of the additional works may vary. Consequently, installers are advised to refer to the Government’s notices to ascertain whether additional works are eligible or not for reduced VAT. If an installation of energy-saving materials takes place as part of the construction of a new dwelling, the supply will be zero-rated. To find out more about the being involved with new builds, please refer to Notice 708: Buildings and Construction.

Certain heating appliances, central heating systems, and renewable source heating systems may also be eligible for the reduced VAT rate if they are grant-funded installs in the sole or main residence of a qualifying person. The reduced rate is available for supplies made under a grant scheme that has an objective of funding the installation of energy efficient measures in the homes of less well-off people. Note, eligibility criteria applies.

To read the Government’s VAT Notice 708/6: energy-saving materials in full, please click here.

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