In a renovation install your ASHP early - here's why

If you install an air-source heat pump (ASHP) to heat your property, it will attract a subsidy called Renewable Heat Incentive, which is a payment to you based on how much CO2 emissions are saved by the installation of the system.


The calculation is done on the basis of the guestimated CO2 emissions numbers in your (less than 2 years old) EPC Report, taking potential savings by loft and cavity wall insulation (which you can often get done for free) into account. Naturally that means that if you upgrade your fabric by other methods, and have a new EPC done before you apply, your subsidy will be materially smaller.


Here is a comparison for 2 semi-detached bungalows, one with an EPC of 74-C, and the other with an EPC of 44-E.


Restored bungalow.


EPC: 74-C.

Annual energy for heating: 6,577 kWh.

Annual energy for water heating: 1706 kWh.

Total energy: 8283 kWh.


Calculated RHI Payments: £530 for 7 years.


Unrestored bungalow.


EPC: 44-E..

Annual energy for heating: 12,283 kWh.

Annual energy for water heating: 3421 kWh.

Total energy: 15704  kWh.


Calculated RHI Payments: £630 for 7 years.


What to do:


Get a new EPC report to document the poor status (about £50), and get your ASHP process done under that rule, rather than doing it later.


In the case of the small detached bungalow above, the difference is worth £700.


(Cynics Corner: The apparent truth that for such an install done the official way to get the subsidy - via an Approved Installer - seems to cost more than having one by a competent installer who is not Approved, by an amount which takes up most of your potential subsidy-gains, is not to be mentioned.)


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Great write up!

As discussed here too, for our house today vs with the planned EnerPHit, the difference is over £3000 reduction if done after renovation. (double that for GSHP). This trick feels "dodgy" but a few installers have indicated it's part of the intended model to encourage ppl to improve insulation and feel good about it as they're 'beating the system'.


Some gotchas:

- you need to first do the minimal improvements (if any) required by the current EPC, even if that is "throw away work" (e.g. installing loft insulation prior to converting loft...)

- doing afore mentioned temporary improvements will require a new EPC to be done, and the RHI likely reduced based on that improvement

- the payments will stop while house is unoccupied while renovating (and I assume those payments "lost")

- if unoccupied for >6 months the ASHP will need to be metered and payments reduced (as based on actual improved usage rather than old-EPC guesstimates)

- if the heating system gets "changed" in the renovation, ofgem need notified and potentially affects the payments (not clear what constitutes a "change" here. Moving pipes? changing rads to UFH? etc..)


To get around the "unoccupancy" and "changes" snags, my <redacted to protect the innocent>  had the great idea of getting the poor-performing (but no work required) EPC issued just before the renovation, but don't install the ASHP yet. Instead, do the full renovation, install ASHP, apply for RHI but use the EPC from before the works. An EPC is valid for 2 years, and nothing in the RHI seems to require it reflects the "current state" of the home, just done at some point in the last 2 years.


If we do go down the ASHP route (purely for Co2 reduction, not economic, reasons) and happen to be using a MSC installer anyway (e.g. they also do our PV) then we might as well do this. Just requires us to get that extra loft insulation put in now, and respin the EPC.



Edited to remove the penultimate paragraph. Not sure if it's been recently updated, but the RHI guide does specifically state the EPC needs to be a true representation of the state of the house when the ASHP is commissioned:  

"Your EPC must include a heat demand figure and must be less than 24 months old at the date of application. Your EPC needs to accurately reflect information about your house, so if you have undertaken construction work on your property you may need to get a new EPC to ensure it reflects your circumstances."

In our case, the renovation includes changing the floor area so a fairly clear case that it would need a new EPC issued.

Just comes back to the fact this whole incentive is broken: someone spending money to fundamentally decrease the energy used in their (non-renewable heated) property should get just as much (or more!) subsidy as someone switching energy source in a crap building.



Edited by joth

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