What Incentives Are There For Switching To Renewable Energy Sources?

4 minute read

March 25, 2024

The widescale development of renewable energy sources is driven, of course, by a need to collectively reduce our carbon impact and utilise energy sources which are more sustainable. The long-term reliance on the national grid and natural gas needs to be phased out and in the most part, this is being recognised by Governments around the world, along with the general public.

Developing the technology to offer renewable energy sources and make them publicly accessible has taken many years, and while this work continues, the cost of investing in renewable energy for a domestic home can be prohibitive, even if there is a strong desire to make the switch away from using fossil fuels for our domestic energy. In most cases there is a payback period where we will see a return on our investment.

Taking solar panels as an example, when we make the initial investment in the panels installation we can calculate, with a degree of accuracy, how long it will take to save enough money on our electricity bills to cover that initial outlay. From that point onwards we are getting a return on our investment.

However, for some households that might not be sufficient incentive and the initial cost is preventing us making the switch to renewable energy sources, even if we want to do the right thing. So there are a number of Government-backed schemes in place in the UK which recognise the need to incentivise people to change their lifestyles and how we heat our homes or produce energy to use around the home.

Boiler Upgrade Scheme (BUS)

This is a scheme to help with the phasing-out of boilers which still rely on fossil fuels. Heat pumps can be air source or ground source, but both are methods of using natural resources to generate heat transfer and produce the heat we need for our water and heating needs around the home. Unfortunately there is a high upfront cost to install a heat pump, so the BUS scheme is available to help you apply for a one-off £7500 grant towards the cost, while you can also apply for £5000 towards a biomass boiler. This scheme runs until April 2028 and will hopefully encourage people to switch to a renewable energy source rather than replace an existing boiler.

Zero VAT on installations

In the Government’s Spring Statement of 2022, it was announced that there would be zero VAT to be paid on the installation of energy-saving systems in residential accommodation. This includes solar panels and heat pumps and is in place until March 2027.

Smart Export Guarantee (SEG)

This is an obligation for all energy suppliers to offer a tariff whereby they make payments to small-scale generators of electricity that is exported back to the national grid. So this is domestic homes and small businesses who have solar panels and produce more electricity than they need. These users will get paid through the SEG scheme for sending this excess electricity back to the national grid.

Energy Company Obligation (ECO)

Gas and electricity suppliers can financially help eligible households become more energy-efficient, including upgrades to renewable energy sources, as well as help with installing insulation. Where a household is not eligible for the ECO scheme, they may qualify for the Great British Insulation Scheme, which rewards households with up to £1500 towards the cost of installing new insulation.

Home Upgrade Grant (HUG)

The HUG scheme is aimed towards low-income households and those living in rented accommodation. The funding is to help make homes warmer and more energy-efficient, through new insulation, but also through upgrades to renewable energy sources.

Let Emergency Cover advise you on renewable energy sources

At Emergency Cover we are committed to helping you reduce your climate impact. A reliable boiler is running efficiently and is not burning excess fuel. This will ultimately save you money by reducing your energy usage, but we recognise the need to phase-out fossil fuel boilers completely and so we do promote the use of heat pumps, and accordingly can offer a boiler cover plan for a renewable energy source. If you need to speak to us about our renewables cover or wish to learn more about how heat pumps work, then contact our team at Emergency Cover today.

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