Households backed with government grants to support ramp up of heat pumps
Energy users can now apply for government grants to swap their gas boilers for heat pumps, after the £450m Boiler Upgrade Scheme was opened to the public today.
The grants are part of Downing Street plans to reach net zero carbon emissions by 2050 and reduce the UK’s reliance on fossil fuels following Russia’s invasion of Ukraine.
Households can receive up to £6,000 towards the price and installation of a ground source heat pump, or £5,000 off the cost of a new air source heat pump or biomass boiler.
The scheme, which will be overseen by market regulator Ofgem, is available in England and Wales until 2025 – although applicants will need to be homeowners with an EPC certificate to be eligible.
Alongside financial support, the scheme is designed to minimise the amount of work property owners need to do.
It is “installer-led,” which means that – rather than being handed the cash – a chosen installer will make an application on your behalf.
They will also liaise with the energy regulator Ofgem on most matters related to the scheme.
This includes telling Ofgem when they’ve installed your heating system and claiming the money from the watchdog at the end of the project
Quotes for an installation will vary across installers, with multiple energy firms offering heat pumps to consumers, meaning shopping around is encouraged.
Business and Energy Minister Lord Callanan said: “We want to make it easier and more cost-effective for homeowners to move away from using expensive fossil fuels for heating. The Boiler Upgrade Scheme means they can make the switch to more efficient, greener alternatives today in an affordable and practical way.”
Energy Minister Greg Hands argued the new scheme could contribute 175,000 green skilled jobs over the current decade
He said: “It will also kick-start a British manufacturing industry that will help bring down prices even further whilst creating huge investment and job opportunities.”
The government hopes to help consumers install 5.5m heat pumps in UK homes by 2030, with the aim of phasing out all gas boilers by 2035.
Heat pumps encouraged as price cap spikes
Heat pumps use electricity to extract heat from the outside air, and are considered more efficient than a gas boiler.
As they draw heat from the environment, they produce around three times the energy they actually use – and since they are electricity-powered, they’re also more eco-friendly.
However, the upfront cost of installing them is regularly considered prohibitive, especially due to the lack of trained heat pump installers.
Sureserve boss Peter Smith told City PM last week it still costs him three times as much to install heat pumps at social housing sites than gas boilers.
He said: “The problem is at the moment that to put in a heat pump costs almost three times the cost of bringing in a gas boiler. So whilst we can do both, the local authority which under cost pressure is not naturally going to move to heat pumps at this stage.”
Alongside the upgrade scheme, the government has outlined its commitment to heat pumps across multiple strategies in recent months.
This includes £30m of funding for heat pump innovations as part of the government’s energy security strategy, as Downing Street looks to reduce the UK;’s dependence on overseas supplies following Russia’s invasion of Ukraine.
This includes the Heat Pump Investment Accelerator Competition, which aims to ‘supercharge’ clean energy and expand nuclear, wind, solar, hydrogen, oil and gas, while supporting domestic oil and gas production in the short term.
Last October, the government also published its Heat and Buildings Strategy, which revealed ambitions for all new heating systems installed in UK homes to be either be low-carbon technologies, such as electric heat pumps, or to be new technologies such as hydrogen-ready boilers.
Household energy bills spiked to nearly £2,000 per year last month, with growing expectations the price cap could reach £2,600 per year or higher in October when Ofgem review the mechanism ahead of October’s next update.
This has partly been driven by soaring wholesale costs, which have been highly influenced by record gas prices – the UK’s primary fuel source, which powers most household boilers.