Swedish company offers instalment charges for heat pump installations in renewed efforts to reduce heating system carbon emissions
Aira have launched their "all-inclusive plan", offering heat pumps on a monthly payment plan(Image credit: NIBE Energy Systems)
A new scheme has been introduced in the UK, allowing homeowners to access heat pumps through a monthly subscription model, without the burden of upfront costs.
Aira, a Swedish company, is offering air source heat pumps on a monthly payment basis, making them more accessible to households unable to afford a large lump sum payment.
This option provides an opportunity for UK households previously deterred by high upfront costs to consider integrating this technology into their homes. We examine the workings of the scheme and its potential benefits for interested homeowners.
£300m investment into UK heat pump market
Aira, a Swedish company, has launched in the UK, offering heat pumps on a monthly subscription basis.
They've acquired All Seasons Energy, a Sheffield-based renewable energy specialist, as part of their strategy to enter the UK clean energy market. Aira has announced a £300 million investment in the UK heat pump market with plans to provide energy to one million UK homes.
Martin Lewerth, Aira Group CEO, stated: "The UK is a crucial market to decarbonise, being one of Europe's most populated countries and with the lowest heat pump penetration rate of just 1%.
"We are excited to introduce Aira's innovative home energy solution in the UK, and we are confident that our offering and value proposition, which includes substantial consumer cost savings, no need for lifestyle changes, and a zero upfront payment model, will be well-received. We are here to accelerate the important transition from dirty gas boilers to clean heat pumps."
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Daniel Särefjord, Aira UK CEO, added: "The Government has confirmed that over 90% of UK homes are suitable for a heat pump. Aira offers a hassle-free, budget-friendly path to lower energy bills and a more climate-friendly economy."
Energy Security Secretary Claire Coutinho MPsaid: "Families should not have to choose between cutting costs and cutting emissions, which is why we increased our Boiler Upgrade Scheme by 50% to £7,500 grants making our scheme one of the most generous in Europe.
"It's fantastic that Aira is investing £300m in the UK heat pump market to help further rollout."
Reducing emissions using the 'Swedish model'
Approximately 10% of greenhouse gas emissions in Europe originate from non-environmentally friendly home heating options such as oil or gas boilers.
However, over in Sweden, 60% of households have switched over to heat pumps effectively decarbonising the country's home heating. Leading the charge is Swedish heat pump manufacturer Aira whose heat pumps use a more environmentally-friendly refrigerant called R290 rather than the far more polluting F-gases.
During a press conference in Stockholm, Harald Mix from Vargas, the parent company establishing Aira, said the Swedish model should be used in more countries.
Now Aira has set a target of installing 5 million heat pumps across 20 European countries over the next decade, a venture that will necessitate the training of tens of thousands of installers.
According to Lewerth, using what they call the 'Swedish model' emissions could reduce to an extent equivalent to removing 10 million fossil fuel-powered cars from the roads.
R290 refrigerant is used in AIra's heat pumps, which is more eco-friendly than F-gases that other heat pumps use(Image credit: Vaillant)
How will the monthly subscription work?
Aira are now offering heat pumps on a monthly subscription with zero upfront fees through their "all-inclusive plan".
An Aira spokesperson explained: "A monthly Aira subscription will start at £40 per month. The payment amount will vary depending on the size and specification of the heat pump, as well as the size and energy efficiency of the home."
Aira's monthly subscription will last for 10 years and include all heat pump maintenance in that time. If homeowners sell their properties before the contract ends, they can either settle the subscription in full to exit early or transfer the subscription to the new owners.
Initially, the installation team will come and assess your home for free to see if it is suitable for a heat pump and installers may also replace radiators if it is deemed necessary.
There will be two heat pump models offered to customers, with one option being specially designed for much smaller homes to replace combi boilers. These heat pumps will be manufactured in Poland and will be designed to integrate with other environmentally friendly devices such as solar panels, batteries, and electric car chargers.
Lewerth claims, “Consumers will save from the very first day,” and could even see savings of 30% meaning a typical monthly bill in the UK could be around £75.
These high installation costs have been blamed for the UK's relatively low heat pump installations, as according to the European Heat Pump Association (EHPA), out of the 21 European countries evaluated, the UK has only 564 heat pumps per 100,000 people, ranking it 20th.
David Hilton, Homebuilding & Renovating's heating expert, explains: "Things are changing but more needs to be done to enable heat pumps as a common mainstream go-to heating solution."
David Hilton
With more than 35 years of expertise, David is a seasoned renewables and ventilation installer, recognised for his longstanding contributions to Homebuilding and Renovating magazine. Holding membership in the Gas Safe Register and armed with a Masters degree in Sustainable Architecture, David stands as an authoritative figure in sustainable building and energy efficiency. His extensive knowledge spans building fabrics, heat recovery ventilation, renewables, and conventional heating systems. Additionally, he serves as a distinguished speaker at the Homebuilding & Renovating Show.
Is the monthly subscription 'too good to be true'?
David Hilton cautions against monthly heat pump subscription services, warning homeowners to check whether the heat pump is a rental or if its truly theirs.
Additionally, Hilton stresses the importance of understanding accountability for performance and maintenance, as well as potential impacts on home value and resale if the heat pump is not owned by the homeowner.
Hilton added: "If the fixed monthly cost is indeed a purchase agreement then (as you would with a car) find out the interest rate, the term of the agreement and whether it is fully paid off at the end of the term or is there a balloon payment? It is also worth checking if the loan is personally guaranteed or secured against the home.
"Check whether the agreement can be sold on by the loan company to another loan company. Check what early settlement options you have. Confirm if there are any extra costs. You may get the heat pump for the fixed monthly fee but what if there are extra costs for additional radiators, pipework changes and new cylinder and controls etc, who pays for that?
"Make sure you cross every T and dot every i. If it seems too good to be true then I would say it probably is."
However, this scheme only applies to initial upfront payments rather than for instalments as offered by Aira.
Ultimately, this is likely to make the BUS redundant for heat pump installations such as this. Although, for those wanting the heat pump grants this payment method could be limited in its impact.
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
