Good Energy to launch new heat pump tariff

28 July 2020   By Dr Lucy Brown, Editor

Green energy supplier has announced first UK domestic energy tariff for users of heat pump technology.

Good Energy say the Government's Green Homes Grant will make it possible for customers to install heat pumps in their homes.

With the grant scheme set to open in the autumn, the new tariff will be made available for customer applications at the same time.

Good Energy are one of the UK's market-leaders for green energy as we noted in our recently updated guide on whether green energy deals are as green as they claim.

heat pump beside home

Heat pump tariff

Good Energy's heat pump tariff will offer cheaper rates for the power customers use and reductions in rates during specific times of the day to allow for more cost-effective usage.

So, at times when renewable output is high, customers will be given more favourable rates to limit the stress on the electricity grid at other times.

Details of the tariff are still scarce, but it will be available by the autumn to coincide with the launch of the Government's Green Homes Grant scheme designed to help homeowners invest in energy efficiency upgrades.

Green Homes Grant

Announced earlier this month, the Green Homes Grant serves a dual purpose for the Government: it helps them progress their goals to make UK homes more energy efficient and it ensures suppliers and installation companies will have work to do later in the year.

The scheme works by providing a grant of up to £5,000 (£10,000 for the poorest households) for homeowners and landlords to upgrade their properties with energy efficiency improvements.

£2bn has been made available for the voucher scheme, which the Government say could benefit up to 650,000 homes across the country.

Good Energy cite the Green Homes Grant as the driving force behind their new heat pump tariff as it makes the installation of low-carbon heat pumps more economically viable for potential customers.

However, the Energy Saving Trust estimate the installation of a typical heat source system is between £9,000 and £11,000, so homeowners will have to invest some of their own money in their installation alongside the grant.

It's worth noting too that the grants of £10,000 are only available to the poorest households and they will be capped at £5,000 for most homeowners.

Renewable and carbon neutral tariffs are becoming more common with Shell Energy announcing two new tariff options in June and British Gas confirming their new digital only brand will match electricity usage with 100% renewable energy.

What are heat pumps?

There are two varieties of heat pump: air source heat pumps (ASHPs) which absorb heat from outside to heat a home and ground source heat pumps (GSHPs) which are buried in gardens and use the heat below ground to heat a property.

Heat pumps are a renewable form of heating powered by electricity, and it's the electricity to power it which will be covered under Good Energy's new tariff.

It is a big investment though and there are different elements to consider, especially whether an existing heating system is inefficient enough to warrant the new investment and whether water heating will limit the efficiency of the new system.

As well as being an option under the Green Homes Grant, heat pump technology is eligible for subsidies under the Renewable Heat Incentive (RHI).

The RHI is another Government scheme which gives financial support to homeowners who install renewable heating systems for seven years.

Any grants used to install the technology must be declared at the time of application for the RHI though, and it's unclear whether heat pumps installed as part of the Green Homes Grant will be eligible for the RHI.

We've previously discussed the RHI and heat pump technology in our guide to community energy. Read that here.

How much could you save on your energy bill?

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