What was the Cleaner Heat Cashback scheme and why was it introduced?

The Cleaner Heat Cashback Scheme was launched to cut carbon and NOx emissions of non-domestic buildings in London. It was the first commercial boiler scrappage scheme of its kind in the world. It was supposed to help improve air quality, reduce health risks and customer costs. As we know, non-domestic buildings account for 44% of carbon emissions in London. Additionally, commercial gas consumption of gas boilers is responsible for 7% of the capital's total NOx emissions.

The scheme originally had a £10m pot available for replacing commercial heating systems in the capital.

How long was the Cleaner Heat Cashback scheme supposed to be running?

30th July 2018 – 31st March 2020 (or until the money would have run out). However, the scheme was cancelled in June 2019.

Why was the Cleaner Heat Cashback scheme cancelled?

According to this article, only two projects have been approved since it was launched and “30 more projects [are] still stuck in the application process”. Instead, the remaining funds will now be going towards the Business Low Emissions Neighbourhoods programme (air quality initiatives) and the Good Growth Fund (regeneration of London). 
 

Who was eligible for the Cleaner Heat Cashback scheme?

  • Small or Medium-sized Enterprises (SMEs) based in Greater London: employ < 250 persons, annual turnover ≤ €50m/annual balance sheet ≤ €43m.
  • Applicants can be
  • Building owners
  • Tenant with responsibility for maintenance or with permission from the landlord

What heating equipment could have been replaced?

  • Existing gas/oil/LPG boiler ≥ 10 years
  • Coal/biomass boiler of any age
  • ≥70kW output (or cascade e.g. 2 x 35kW)
  • Product must be in working order

What type of new heating system can be installed as part of the Cleaner Heat Cashback scheme?

  • Gas/LPG boiler ≥90% efficient (ErP) with NOx emissions ≤40mg/m³
  • Air source heat pump > 250% efficiency (ErP)
  • Ground source heat pump > 330% efficiency (ErP)
  • Hybrid system containing one or more of the above + solar thermal
  • Connection to a heat network

PLUS Installation must be carried out by an accredited, manufacturer-approved installer.

What was the maximum amount of cashback for a new commercial heating system?

No maximum amount, but applications > £70,000 will be looked at more closely.

What costs were covered under the Cleaner Heat Cashback scheme?

  • Capital costs of new equipment that fulfil requirements
  • Capital costs of system ancillaries (except for new radiators/heat emitters, upgraded BMS)
  • Removal of old boiler and flue
  • Installation of replacement heating & connection to existing heating system (excluding ancillary works such as
  • new radiators or pipework)
  • System cleaning, first fill water treatment and recommissioning in line with best practice
  • Metering - heat meters (but NOT electricity meters, submeters)
  • Heat networks: removal of old boiler including redundant ancillaries, capital costs of Heat Interface Units (HIUs) with integrated controls and their installation, pipework connection to an existing network up to 50m away (but NOT changing of radiators/emitters, heat metering, upgrade of controls/BMS, complete disconnection from gas mains, pipework connection to existing heat network >50m away)

How much cashback could have been claimed?

 

 

Percentage of total heating system replacement cost covered by Cleaner Heat Cashback Scheme

Old system

New system

Outside Air Quality Focus Area

Inside Air Quality Focus Area

Gas/Oil/Coal/LPG Boiler

Gas boiler

30

35

Heat pump

35

40

Hybrid systems (solar thermal)

35

40

Heat network

35

40

LPG boiler

LPG boiler

30

35

Biomass boiler

Heat pump

35

40

Heat network

35

40

Air Quality Focus Areas can be seen on this map.

What measures to reduce NOx and CO2 emissions can we expect instead of this commercial boiler cashback scheme?

The Government has announced that this project will be ‘rescoped’ and the money will be invested in schemes like the Business Low Emissions Neighbourhood: These tackle air pollution in five boroughs through ‘measures such as anti-idling campaigns, zero-emission delivery services and cleaner walking routes for staff and customers.’

Another scheme mentioned in this context for ‘diverting’ the Cleaner Heat Cashback funds was the Good Growth Fund aimed at supporting the regeneration in London in cooperation with the London Economic Action Partnership.

On a bigger scale, UK Government will be providing £5m in funding for green mortgages and domestic energy efficiency upgrades. A further £10m is supposed to incentivise companies to come up with innovative, cost-saving methods to upgrade the energy efficiency of existing housing stock. You can read more about this here.