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London commercial boiler scrappage scheme gets warm industry welcome

Mayor of London’s £10m Cleaner Heat Cashback scheme is designed to improve air quality and save energy. Calls for scheme to be widened

The Mayor of London, Sadiq Khan, has unveiled a £10m commercial boiler scrappage scheme that he says will help small businesses save money on their energy bills, as well as helping to improve the capital’s air quality.

The Cleaner Heat Cashback scheme, which is heralded as the first of its kind in the UK, will provide between 30 to 40 per cent cashback to small and medium-sized businesses, when they replace older, polluting boilers, with new, cleaner heating systems. Businesses will get a higher percentage of cashback (35 per cent) if they replace with a renewable technology.

To be eligible, boilers must be 70 kW or more and over 10 years old if they are gas, LPG or oil. However, the scheme will replace coal or biomass boilers of any age.  Replacement systems must be at least 90 per cent efficient gas or LPG boilers or connect to a heat network or renewable technologies, such as solar thermal, air or ground source heat pumps and have NOx emissions of 40mg/kWh or less.

Eligible businesses, who meet the EU definition of an SME of fewer than 250 employees and an annual turnover of under €50m can apply for the scheme here.

SMEs in London will be able to receive a contribution of 30 per cent towards the cost of installing a new high-efficiency, low-NOx gas or LPG boiler, or 35 per cent for a renewable system. This figure will increase to 35 per cent in Air Quality Focus Areas (or 40 per cent for a renewable system). Where new boilers are used in a hybrid system, the contribution increases to 35 per cent (40  per cent in AQFAs). The scheme will start on 30 July 2018 and will run until 31 March 2020, or until funds last.

Qualifying businesses will receive an eligibility assessment by the Energy Savings Trust, which will then be followed by a technical assessment of the existing system and proposed replacement by Kiwa.

More details can be found about the process and eligibility in the scheme’s FAQ document in Related Files below.

The scheme is part of the Mayor’s comprehensive programme of air quality measures, and will also help to make London’s workplaces more energy efficient and cut the capital’s carbon emissions, the Mayor’s office said.

The Mayor’s office noted that London’s workplaces make up around 40 per cent of the capital’s greenhouse gas emissions and this scheme will help fulfil the Mayor’s ambition to make London a zero-carbon city by 2050.

It said: ”The Mayor is doing everything within his power to tackle London’s toxic air which leads to the premature deaths of thousands of Londoners every year. Newer, more energy efficient heating systems will help to tackle air pollution in the capital as it will see a reduction in harmful NOx emissions. Commercial gas consumption is currently responsible for 7 per cent of London’s NOx emissions, but as the Mayor’s hard-hitting measures to cut harmful pollutants from transport take effect, this proportion will increase. The Cleaner Heat Cashback scheme is part of the Mayor’s £34m Energy for Londoners programme which aims to make London’s homes warm, healthy and affordable, its workplaces more energy efficient, and to supply the capital with more local, clean energy.”

The scheme has been welcomed by the boiler industry as a way to incentivise replacement with more efficient models. Chris Meir, Sales Director at Remeha, said: “Far too many UK non-domestic buildings rely on dated, inefficient boiler plant, wasting energy, creating unnecessarily large heating bills and polluting the air with needlessly high greenhouse gas emissions. The exact savings from retrofitting condensing boilers will, of course, depend on the nature of the building and the existing boilers. But our customers consistently report outstanding results – a fall in gas consumption of 48 per cent from one, an annual carbon reduction equivalent to 217 tonnes from another, along with an annual saving of £35,000 in gas bills. And these are far from isolated outcomes.”

Mr Meir added: “Replacing less efficient or ageing boilers with advanced condensing boilers is a simple, cost-effective option that could be a small step for big environmental and financial changes. London alone expects to reduce NOx emissions by 80 tonnes a year, carbon emissions by between 20 and 70 thousand annually, and shave up to £7m off business bills. Just consider the scope for savings if carried out on a national level. We would therefore urge the government to follow London’s lead and implement a countrywide commercial boiler scrappage incentive… in so doing, it will support the government’s Clean Growth goals by accelerating the move to a cleaner, low carbon future.”

Shirley Rodrigues, Deputy Mayor for Environment & Energy, said: “There are thousands of small businesses in London who have older boilers and this hugely innovative scheme not only helps them to save money, but it also reduces carbon emissions and improves the capital’s air quality. Businesses could save hundreds of pounds a year on energy bills by switching from an older, inefficient boiler or heating system – and this is exactly the kind of initiative that will help us achieve the Mayor’s ambition of making London a zero-carbon city by 2050.

The mayor’s office noted the commercial scheme follows the domestic scrappage programme Better Boilers. However, the relatively low number helped by the scheme - ’nearly 500 fuel-poor households’  will come as a disappointment to the heating industry.

In addition the Mayor’s RE:FIT Programme has been retrofitting energy efficiency measures to London’s public sector buildings, installing measures such as LED lighting, heating controls and solar PV, together with new energy efficient street lighting.

The scheme is being delivered in partnership with the Energy Savings Trust.

Philip Sellwood, Chief Executive of Energy Saving Trust said: “We are delighted to be supporting the Mayor of London to deliver this ground-breaking scheme. It will help smaller businesses across London to benefit from energy efficiency which in turn will enhance air quality across the city. We hope that other cities across the UK follow the Mayor’s lead and provide similar schemes.”


The Cleaner Heat Cashback is open to SMEs in Greater London with older, inefficient boilers. They must own their premises, be a tenant with building maintenance responsibility or have their landlord’s permission and pay commercial rates. Businesses can be of any type if they meet the EU definition of an SME of fewer than 250 employees and an annual turnover of under €50m.

To be eligible, existing heating systems must be working gas, oil or LPG boilers of a minimum 10 years old, or coal or biomass. Systems must be a minimum size of 70 kW. Replacement systems must be at least 90 per cent efficient gas or LPG boilers or connect to a heat network or renewable technologies such as solar thermal, air or ground source heat pumps and have NOx emissions of 40mg/kWh or less. Replacement heating systems need to be installed by accredited installers on the system manufacturers’ approved list.



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