There has been a mixed reaction from the heating industry to the government's announcement of up to £1,250 funding for the Renewable Heat Premium Payment Scheme.

Details of the Renewable Heat Premium Payment scheme (RHPP) have been announced which will make homeowners eligible for up to £1,250 of funding towards the cost of installing renewable heating systems such as biomass boilers, air and ground source heat pumps and solar thermal panels.

The government's new £15 million RHPP scheme will be open for applications on 1 August 2011 until March 2012, and is expected to support up to 25,000 installations.

The scheme is focusing on around 4 million households in Britain not currently heated by mains gas, which rely on higher carbon forms of heating that the Department for Energy & Climate Change (DECC) said tend to be more expensive than gas, such as heating oil and electric fires.

The announcement has had a mixed response from the heating industry. Vokera's marketing director Eleanor Fox praised the scheme's "simplicity", but said that the premium payments "aren't enough to dramatically increase uptake of renewables, [though] they will certainly help".

BEAMA director Kelly Butler said the scheme would "provide an incentive to installers to register with the Microgeneration Certification Scheme (MCS)", which would in turn "give the industry further credibility".

Dimplex's Chris Davis said the RHPP was "a positive step", but that many questions still needed to be answered. "Until more is known about the eligibility criteria for the full domestic Renewable Heat Incentive (RHI) scheme, due to start in October 2012, it’s uncertain whether the RHPP will give householders the confidence to opt for renewable heating,” he said.

As part of the scheme, participants must provide feedback on their experience through a set of surveys that allow the government to gather information to better understand renewable heat technologies.

The government will also provide, for a significant sample of participants, additional meters for their heating equipment. This will provide more detailed information so DECC can compare manufacturers' and installers' claims about performance with real data on energy use.

Climate Change Minister Greg Barker said: "Getting money off an eco heater will not just cut carbon emissions, it will also help create a market in developing, selling and installing kit like solar thermal panels or heat pumps."

The Premium Payment scheme will be run by the Energy Saving Trust and an information line and website – – is available to provide people with more information.

From August, grants for the following technologies will be available: