Warm Home Loans Open for Heat Pumps, Batteries, Solar
A government-backed loan scheme for home energy upgrades launched on Tuesday. Households can apply for interest-free or "low-interest" loans to pay for heat pumps, batteries and solar panels. The loans run from £7,500 to £35,000.
The scheme is called Warm Home Loans. Energy suppliers including British Gas and E.On have teamed up with lenders, Tandem Bank and Homeserve respectively. They offer the loans to customers at a discount on high street rates. Other lenders taking part are HTG Finance, Propensio, Secure Trust Bank, Selina Finance, South Manchester Credit Union, Sunsave, The Money Co-op and This Bank.
How much can be borrowed
Households swapping a gas boiler for an air-source heat pump could borrow up to £10,000. A ground-source heat pump qualifies for up to £35,000. Borrowers can also draw on the existing boiler upgrade scheme, which offers grants of up to £9,000 for replacing fossil fuel heating.
The government says a heat pump, battery and solar panels together could save a household up to £550 a year on energy bills. A time-of-use tariff could add another £300 a year.
Ministers believe the loans will let "thousands more households" fit clean technology and spread the repayments over many years. Soaring energy costs have driven record demand for such upgrades over the past year.
Energy secretary Miatta Fahnbulleh said: "Energy is an everyday essential that must be affordable for everyone. These government-supported loans will help families across the UK upgrade their homes with no upfront costs to make them warmer and cheaper to run."
Chris Norbury, chief executive of E.On UK, pointed to a recent trial in Coventry. Fuel-poor customers there saved more than £250 a year on average by combining a home battery with a time-of-use tariff. He called the loans "an opportunity to take that further".
Budget plans for the grants
The terms were set out a day before chancellor John Healey delivers his first budget on Wednesday. The budget is reported to include plans to scale back heat pump grants under the boiler upgrade scheme.
The scheme is not expected to be scrapped, but sources say hundreds of millions of pounds will come out of its £2.7bn five-year budget. Treasury officials consider it a subsidy used mainly by middle-class households. Grants have typically been up to £7,500 towards a £13,600 heat pump installation.
Grants of up to £9,000 are likely to remain for homes off the gas grid that depend on high-cost heating oil. Those grants could sit alongside the loans to cover a heat pump's full cost.
Source: The Guardian