Renewable heating systems: Household grants available

Households looking to install renewable heating systems are now eligible for up to £1,250 from the government.

People who opt for greener methods such as biomass boilers and solar panels can apply to the £15m Premium Payment fund set up to support 25,000 installations.

It is mainly aimed at the 4m homes in Britain not heated by mains gas that rely on higher carbon heating methods.

But Friends of the Earth said "disappointing" caveats short-changed a potentially ground-changing scheme.

The scheme to help pay for the installation costs of systems such as air and ground source heat pumps is open for applications from 1 August until March 2012.

Run by the Energy Saving Trust, it will focus mainly on those heating their homes with high carbon and typically more expensive methods such as electric fires and heating oil.

A similar scheme for Northern Ireland is among the proposals in a current consultation by the Department of Enterprise, Trade & Investment.

'Investor uncertainty'

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."

The Department of Energy and Climate Change says it will closely monitor energy data and performance through additional meters and detailed surveys.

"When people have the kit installed in their homes they really see the benefit," said Energy Saving Trust chief executive Philip Sellwood.

"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."

But environmental group Friends of the Earth said the scheme, which counts towards the government's 2020 renewable energy targets set by the EU, did not go far enough.

Alan Simpson, an adviser on sustainable energy, said: "Potentially this is an internationally ground-changing initiative that could put the UK amongst world leaders, but it is driven by a towering lack of ambition."

He said the project "short-changed" itself and had all sorts of "disappointing" caveats.

The system was always meant to include annual payments or subsidies as well as a one-off installation payment, but the government had not yet worked out how to calculate them, he said.

That created "investor uncertainty" as people were not sure how much to budget for in the future, he said.

He also said the £300 payments for solar thermal panels were too low to affect market demand.

And he called for all payments generally to be applied across the board not just to those almost exclusively in homes without mains gas heating.