Your questions answered

Which organisations can apply under the LCBP2 grant scheme?

Phase 2 of the Low Carbon Buildings Programme provides £50m of capital grant funding for the installation of various micro-generation technologies by organisations in the UK public and not-for-profit sectors including:

• Local authorities
• Housing associations
• Schools, colleges and universities
• Public service organisations
• Environmental trusts
• Registered charities

Who installs/provides the systems?

All products and installation services must be sourced through DECC (BERR) appointed ‘Framework Suppliers’. Dimplex is an appointed Framework Supplier for ground source heat pumps and will supply the product and installation services through Dimplex Approved Installer Partners, all of whom are accredited to provide these services within Dimplex’s Framework Supplier agreement with the DECC (BERR).

What areas of the country are covered?

The scheme is operating in England, Wales, Scotland and Northern Ireland (Isle of Man and the Channel Islands are excluded).

What level of grant is available and how long will they be available for?

Up to a maximum of £1.0 million. The programme began in December 2006 and aims to commit the bulk of its funding by June 2009. For ground source heat pumps the grant level is 50% of all product and installation costs.

What can the grant be used for?

The grant must be used to fund the supply and installation of a renewable energy scheme at a permanent building located in the United Kingdom. In general only costs directly related to the installed equipment and work are eligible.

For ground source heat pumps, this can be considered to include:

• The cost of the heat pump, ground collectors and other equipment (such as water cylinders, buffer tanks and hydraulic accessories).
• Direct costs for all ground works relating to the installation of boreholes or horizontal ground collectors
• Direct costs of connecting the heat pump to the electrical supply and heat distribution system of the property

Specifically excluded from the grant is:

• VAT on all items
• Costs of any extended warranty, beyond the standard product warranty offered by Dimplex and warranties offered by installers for installation work
• Costs of any other materials or works, such as (but not limited to) upgrading of radiators or other elements of the central heating system at the property

How does the application process work?

LCBP2 is managed by the BRE, which is responsible for all aspects of the application process.

Applicants will be able to apply either online or by post. Online applications are preferred, as they reduce administration costs and can be more promptly processed. Online applications can be made at http://www.lowcarbonbuildingsphase2.org.uk

A letter confirming receipt of the application will be sent out within 2 working days of BRE receiving the application.

The application will be assessed and the applicant contacted with the decision within 5-7 working days. Grant applications over £100,000 may require more detailed assessments and therefore may take longer.

Are there any other eligibility criteria for receiving a grant?

The BRE will assess applicants against criteria as set out in the application form; these in the main relate to the type of organisation, use of framework suppliers and meeting the £/tonne CO2 benchmark figures. In addition, applicants will only be entitled to receive a grant if it is not an ‘undertaking’ within the meaning of the rules on State Aid.

Can I apply for a Phase 2 grant for an installation which is larger than the stated maximum heat/power output for any of the technologies?

The limits to the size of the installation are in line with the definitions of microgeneration stated in section 82 of the Energy Act 2004, namely:

a) in relation to the generation of electricity, 50 kilowatts;

b) in relation to the production of heat, 45 kilowatts thermal.

Although only applications that meet the stated limits will be accepted, LCBP2 may contribute to the first 45 or 50kW of larger installations that use multiple products from the scheme product list for each property.

How is the £/tonne Co2 benchmark calculated?

Information gathered from section D of the application form will be used to estimate the cost (based on the total installation cost) of saving a unit quantity of carbon dioxide over the expected lifetime of the installation.

These figures are compared to the following ‘benchmarks’ and if they are significantly higher, it may cause the BRE to reject the application or request further clarification. The benchmark figures below are expressed as £/tonne of carbon dioxide.

For ground source heat pumps, the following benchmark figures are used, dependent on the fuel type being displaced by the heat pump system (ie what is being removed or would have been otherwise installed):

Benchmark £/tonne CO2 saved for ground source heat pumps

Assumed life of 20 years

Calculation formula: £/tonne CO2=(total eligible costs x 1000) / (energy yield x emission factor x assumed life)

For example. A 45kW system displacing oil costing £56,000. Yield – 1800hrs/yrx45kW.

Benchmark target: <£225/KgCO2/kWh.

£/tonne CO2 = (£56,000 x 1000) / (45 x 1800 x 0.25 x 20) = £138.27

What other supporting documents need to be supplied with the application?

Electronic copies of quotations from all installers either attached to the online application or enclosed on CD-Rom/floppy disk for paper applications. Also proof of not-for-profit organisation status/type/legal entity attached to the on-line application or enclosed on CD-Rom/floppy disk. Please note submitting these documents only as paper copies will render the application invalid.

When is the grant paid?

Applicants will be able to make an interim claim of up to 50% of the total grant for ongoing work and/or capital costs based on providing original paid supplier and/or installer invoices.

The total grant, or the remainder following an interim claim, may be claimed when the installation of all technologies for which the grant offer was made (whether at the same property or various different properties) have been completed.

How many grants can an organisation receive under LCBP2?

Organisations can apply for a maximum of up to £1.0million in grant funds per site. A site may include more than one property and maximum of three eligible technologies may be grant-assisted at each property (unless pre-agreed by BRE and BERR) Multiple applications form one organistion for different sites will be accepted.

How many technologies can be applied for?

A maximum of three eligible technologies at each proposed site. Requests for more technologies need to be agreed by the BRE and DECC.

You should note however that Dimplex are only able to offer ground source heat pumps under LCBP2.

Am I able to match fund from any other programmes?

DECC advises that you are not entitled to apply for or receive a grant for the proposed technology/ies and/or its installation at the proposed property/ies if the applicant has already received or will receive any other funding from the national government or one of the Devolved Administrations in relation to the technology and/or its installation at the property.

This includes, but is not limited to any funding that may be or has been available under:

• Low Carbon Buildings Programme Phase 1
• ClearSkies
• Major PV Demonstration Programme
• Bioenergy Capital Scheme
• Scottish Communities & Household Renewables Initiative
• Scottish Biomass Support Scheme

However, applications may receive funding from other public sources (including BIG lottery and local government). Dimplex Renewable Energy Finance is also eligible as a match funding mechanism.

How long will the grant offer be valid for?

The grant offer letter will specify a deadline, usually within 12 months from the date of the letter, by which time installation must have been completed.

How long must the system operate once installed?

It is a condition of the grant offer that the system will remain installed and in use at the property and will not be modified or relocated in such a way as may adversely affect its performance, for a period of at least 5 years following payment of the grant. The applicant is responsible for ensuring this condition is met.

How were the Framework Suppliers chosen?

Framework Suppliers were selected by the DECC (then DTI) following a competitive tendering process to ensure quality, range and value for money. Contract notices for Framework Suppliers were published at the Official Journal of the European Union (OJEU) in June 2006.

Are all Dimplex heat pumps available for grant assistance under the programme?

Only ground source heat pumps are eligible under LCBP2 (ie air and water source heat pumps are excluded). For the purposes of the programme, Dimplex has specified specific models from our ground source range covering the most likely requirements for both domestic and commercial applications.