As the United Kingdom strides towards a low-carbon economy, government support for green energy plays a crucial role in driving this transformation.
A range of schemes, spanning subsidies, grants, and tax incentives, encourage investment in renewable technologies, promote energy efficiency, and facilitate the transition to a sustainable future. In this article, we explore the key green energy support schemes currently available across the UK.
Contracts for Difference (CfDs)
The Contracts for Difference (CfDs) scheme is the UK government’s flagship mechanism for supporting low-carbon electricity generation. It offers renewable energy developers a guaranteed, fixed price for the electricity they produce, known as the ‘strike price’. If market prices fall below this level, the government tops up the difference; if prices rise above it, developers pay the excess back. By providing price certainty, CfDs reduce investment risk and encourage the development of new renewable projects, from offshore wind farms to emerging technologies like tidal energy.
Feed-in Tariffs (FiTs)
Although closed to new applicants since 2019, Feed-in Tariffs (FiTs) continue to benefit existing participants. FiTs offer a guaranteed price for small-scale renewable electricity generation, such as solar photovoltaic (PV) panels, small wind turbines, and micro-hydro systems. Homeowners, businesses, and community groups who installed eligible systems before the deadline enjoy fixed payments for the energy they generate and export back to the grid. This scheme has been instrumental in making renewable technologies financially attractive at the domestic and small business level. A question here is why was it discontinued? Is this an infrastructure impacting strategy or a cost to the UK treasury?
Renewables Obligation (RO)
The Renewables Obligation (RO), aimed at larger-scale renewable electricity projects, requires licensed UK electricity suppliers to source an increasing proportion of their electricity from renewable sources. Suppliers demonstrate compliance by presenting Renewables Obligation Certificates (ROCs), creating a strong incentive to invest in renewable energy infrastructure. Although the scheme closed to new generators in 2017, it continues to support projects accredited under the RO, maintaining momentum towards greener energy generation.
Green Deal
The Green Deal helps homeowners and businesses improve energy efficiency and adopt renewable energy technologies. Under this scheme, participants can install energy-saving improvements—such as insulation, heating upgrades, and renewable systems like solar panels or heat pumps—and finance the costs through savings on their energy bills.
This pay-as-you-save model allows property owners to make essential green upgrades without upfront costs, supporting widespread adoption of low-carbon technologies.
Boiler Upgrade Scheme (BUS) and Domestic Renewable Heat Incentive (Domestic RHI)
The Energy Company Obligation (ECO) is a long-running initiative that mandates energy suppliers to deliver energy efficiency measures to homes, particularly those of vulnerable and low-income households. Complementing ECO, the Great British Insulation Scheme targets improving the energy efficiency of homes across the country through measures like loft and cavity wall insulation. By lowering energy demand, these schemes indirectly support the UK’s green energy transition and make homes more resilient against rising energy costs.
Energy Company Obligation (ECO) and Great British Insulation Scheme
The Energy Company Obligation (ECO) is a long-running initiative that mandates energy suppliers to deliver energy efficiency measures to homes, particularly those of vulnerable and low-income households. Complementing ECO, the Great British Insulation Scheme targets improving the energy efficiency of homes across the country through measures like loft and cavity wall insulation. By lowering energy demand, these schemes indirectly support the UK’s green energy transition and make homes more resilient against rising energy costs.
National Wealth Fund
- Heat Networks Investment Project (HNIP) and the new Green Heat Network Fund (GHNF), support low-carbon district heating.
- The Renewable Transport Fuel Obligation (RTFO) promotes biofuels and renewable fuels for transport.
- Home Upgrade Grant (HUG) — helps low-income households improve energy efficiency and install low-carbon heating.
- Maybe even mention the Industrial Energy Transformation Fund (IETF) supports heavy industry in reducing emissions.
Renewable Transport Fuel Obligation (RTFO)
The Renewable Transport Fuel Obligation (RTFO) supports the decarbonisation of the UK’s transport sector. It requires suppliers of large volumes of road transport fuel to ensure a proportion comes from renewable and sustainable sources, such as bioethanol and biodiesel. This scheme not only reduces carbon emissions in transport but also drives investment in advanced renewable fuels and emerging technologies like hydrogen fuel for heavy goods vehicles.
Heat Networks Investment Project (HNIP) and Green Heat Network Fund (GHNF)
Low-carbon heat networks are vital for meeting the UK’s climate goals. The Heat Networks Investment Project (HNIP), and its successor, the Green Heat Network Fund (GHNF), offer financial support for the development of heat networks that use renewable, recovered, or low-carbon heat sources. By backing innovative heating solutions, these schemes aim to provide sustainable alternatives to individual gas boilers, especially in urban areas.
Home Upgrade Grant (HUG)
The Home Upgrade Grant (HUG) targets low-income households living in off-gas grid homes, funding energy efficiency upgrades and the installation of low-carbon heating solutions such as heat pumps and solar thermal systems. This scheme ensures that the benefits of the green transition are felt across all communities, including those most at risk of fuel poverty.
Industrial Energy Transformation Fund (IETF)
Heavy industry is one of the most challenging sectors to decarbonise. The Industrial Energy Transformation Fund (IETF) provides funding to help energy-intensive businesses invest in technologies that cut carbon emissions, improve energy efficiency, and future-proof their operations. Supporting sectors like chemicals, cement, and steel production, the IETF underpins the UK’s broader industrial decarbonisation strategy.
The UK Government Support
The UK government’s robust support framework for green energy spans a diverse range of schemes tailored to promote renewable generation, energy efficiency, and industrial transformation. Whether through price guarantees, financial grants, or strategic investments, these initiatives are crucial to achieving the nation’s net-zero targets and building a greener, more resilient economy.
For individuals and businesses alike, tapping into these opportunities can offer financial benefits while contributing to the UK’s sustainable future.
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