The Boiler Upgrade Scheme grant increase from £5,000 to £7,500, as announced by Prime Minister Rishi Sunak in September, is now available from today (23 October).
This increase will make installing a heat pump – which typically averages at £7,000 according to the trader platform, Checkatrade – cheaper than installing a gas boiler, which costs between £2,500 and £3,000.
Today, the government has also made £10 million available to support innovation in the heat pump sector through the Heat Pump Ready programme, which aims to further cut installation costs and launched the Welcome Home to Energy Efficiency campaign to help improve domestic energy efficiency.
“No one should have to choose between cutting costs and cutting emissions – our pragmatic approach means we can continue to deliver on our ambitious net zero targets without unfairly hitting the pockets of hardworking families,” said energy security secretary Claire Coutinho.
“From today, for some households starting prices for heat pumps could now be below the average gas boiler, as we have increased the cash grant by 50 per cent to £7,500 – making our scheme one of the most generous in Europe.
“This will help thousands of people across the country reduce their energy use and keep their homes warm.”
When the grant increase was first revealed, a number of heating industry members highlighted that there was not yet mention of a boost to the scheme’s overall funding, meaning that fewer people would be able to benefit from the BUS as the pot would run out faster.
Ian Rippin, CEO of the Microgeneration Certification Scheme (MCS) told Current± that as 10,000 grants were paid in the first year of the scheme which cost over £50 million altogether, only £150 million per year allocated for the scheme remains until 2028.
Therefore, without adding to the scheme’s overall budget, the increase on individual grants will only support 3% of the 600,000 annual installations by 2028 target, added Rippin.
This has been addressed by the government today who stated that the “future [BUS] budget is not fixed” and revealed that the £450 million BUS funding pot will also receive a part of the £6 billion allocated for energy efficiency and clean heat over 2025 and 2028,
Government green home funding saves over 20GWh of domestic energy
New statistics to the end of August 2023 show that government funding for domestic low carbon heating has saved over 20GWh of domestic energy in England.
The statistics cover the Green Homes Grant Local Authority Delivery Scheme (LAD) for which the Department for Energy Security and Net Zero (DESNZ) allocated £500 million to support energy efficiency upgrades – including heat pump installations – for low-income households.
Phase 1 of LAD saw £200 million of grants allocated across over 136 Local Authorities, Phase 2 allocated £300 million to five Local Net Zero Hubs, and Phase 3 of the LAD £281 million for Local Authorities to support low income households off the gas grid.
The report also included data from Phase 1 of the Home Upgrade Grant (HUG) which allocated £152 million funding for Local Authorities to support low income homes off the gas grid, through the installation of heat pumps with delivery starting from January 2022 and ending in September 2023.
|Number of heat pumps installed||Estimated Annual Energy Savings (GWh)|
|LAD Phase 1||1,052||6.1|
|LAD Phase 2||1,706||8.8|
|LAD Phase 3||271||1.5|
|Hug Phase 1||648||4.0|
Moreover, according to DESNZ’s statistics, the heat pumps installed as part of the government’s various funding schemes have resulted in estimated annual bill savings of over £690,000.