A new scheme has launched that allows homeowners in the UK to pay for a heat pump on a monthly subscription with no upfront costs.
Swedish company, Aira, are making ground and air source heat pumps available to homeowners who cannot afford one large lump sum payment by allowing customers to pay monthly instead.
The option could give UK households that have found the upfront cost of installing a heat pump unaffordable a chance to add the technology to their home. We look at how the scheme works and whether it might be worth looking at.
£300m investment into UK heat pump market
Swedish company, Aira, have officially launched in the UK offering heat pumps on a monthly subscription.
The company has acquired All Seasons Energy, a Sheffield-based renewable energy specialist, in an attempt to muscle into the UK clean energy market and announced a £300 million investment into the UK heat pump market as part of their 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."
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 MP said: "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.
"Our plan is working, and we are seeing an increase in applications. 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.
How will the monthly subscription work?
Aira is offering heat pumps on a monthly subscription with zero upfront fees.
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 to see if it is suitable for a heat pump (for instance whether there is enough insulation). 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.
Can this improve UK heat pump installation rates?
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."
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'?
Asked about this monthly heat pump subscription service, David Hilton warns: "If you are offered a ‘free’ heat pump or even a heat pump on an ‘affordable’ fixed monthly cost then there are a number of questions that you need to ask: Who owns the heat pump? If an investor is ‘giving’ you a heat pump for a fee then is it your heat pump or is it a ‘rental’? If the heat pump is not yours then will this fact negatively affect your home value and resale potential?"
Hilton added homeowners should check for who is accountable for the performance and maintenance of the heat pump. He continued: "If the heat pump is not yours then will this fact negatively affect your home value and resale potential?
"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."
How will this affect the BUS?
The Boiler Upgrade Scheme (BUS) offers heat pump grants £7,500 for air source heat pump installation.
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.
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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.