Helping UK homeowners save money on their heating

Are Free Air Source Heat Pumps Coming to the UK?

Free air source heat pumps could soon be coming to the UK thanks to changes to the Government’s Renewable Heat Incentive (RHI). The Ref Assignment of Rights legislation, which comes into effect on June 27th, will allow private investors to benefit from RHI payments if they’re funding energy improvements.

This effectively means that the RHI allows an ‘investor’ to help fund the purchase, installation and maintenance of a household or landlord’s renewable heating system – in other words, free air source heat pumps! Investors will receive the RHI payments from the system and homeowners will benefit from paying a fixed monthly fee for their energy, reducing their bills and beating energy providers price hikes.

This news comes alongside rises in the amount paid under the RHI in recent months, making it an attractive incentive to private investors. At time of writing the current current rate paid under the RHI per kWh is 10.49p, that’s an increase of 43% since the RHI started in 2014 so unlike the Solar Fit rate, RHI payments have continued to increase every year rather than digress.

graph of historical RHI payments for air source heat pumps

Source: ofgem

Free heat pumps vs. free solar

The premise of these free air source heat pumps is similar to that of free solar (also known as the rent-a-roof scheme), which in the past proved extremely popular but had some issues.

Both schemes follow the same basis; a private investor installs a renewable technology and takes the payment for this from the government incentive in place, whilst the homeowner enjoys the benefits of the new system. In the case of solar this was the government’s Feed-in Tariff (FiT) and for the heat pumps the RHI. There are however a couple of differences which set the schemes apart…

Effect on home value/ selling your property

The contract length of the free solar scheme could be up to 25 years! This ties in with the length that the FiT original lasted for, and has meant many people with ‘free solar’ have experienced some complications when it’s come time to sell their homes as the panels are tied in with it.

Free heat pumps however would likely have a much shorter contract with the RHI only lasting for 7 years. Although it would be specific to each provider, it is more likely a free heat pump would be on a ‘hire-purchase’ style of contract, meaning it is not tied into the property. If you decide to sell your property during the 7 year term then you can either ask the new property owner if they want to take on the agreement or you have to pay any outstanding balance.

More people could get a free air source heat pump

Due to the specific criteria of the free solar scheme (such as the direction your roof faces, the angle it tilts etc.) a lot of people were unable to benefit from it. Heat pumps on the other hand should have a lot less criteria and they can benefit far more properties across the UK.

When will we know more about free heat pumps?

Although free air source heat pumps are very likely to become an option in the UK, it’s still early days. Some providers are already setting out their plans for the scheme, so stay tuned for more information on Home Heating Guide over the coming months. In the meantime you can learn more about air source heat pumps in our complete guide.

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