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Government Boiler Upgrade Scheme failing to drive interest in heat pumps

The Boiler Upgrade Scheme offers grants to support the adoption of heat pumps. Image: Centrica.

The Boiler Upgrade Scheme offers grants to support the adoption of heat pumps. Image: Centrica.

The government's £450 million Boiler Upgrade Scheme is yet to deliver increased demand for heat pumps, according to a new survey from the Ground Source Heat Pump Association (GSHPA).

In May, the government launched the new scheme designed to ease the adoption of low carbon heating technologies through a series of grants.

It offers £5,000 off the cost and installation of an air source heat pump, £5,000 off the cost and installation of a biomass boiler and £6,000 off the cost and installation of a ground source heat pump, all of which can be completed without VAT.

But the scheme is yet to deliver an upswing in enquiries for domestic heat pumps, GSHPA members have said. In fact, it found that there have been fewer enquiries over the past two months than there had been a year ago.

“The results of our members survey are stark,” said Laura Bishop, chair of the GSHPA.

“Despite the Government wanting to see a faster take-up of heat pumps installations, 62% of our members have seen a drop in customer enquiries for individual heat pump installations, with a direct impact on turnover and 86% of our members feel that the heat pump is less investible than a year ago.”

According to the latest figures from Ofgem, during the period 23 May to 30 June 2022, 857 Boiler Upgrade Scheme vouchers were issued and 169 redeemed for <45kWth heat pumps (air source and ground source) and biomass heating.

The scheme – first dubbed the Clean Heat Grant – has been introduced as a replacement to the domestic Renewable Heat Incentive, which closed in March 2022.

However, at the current rate of uptake it is “certainly no replacement” said Bishop, with further measures required to kick start the market for heat pumps.

In particular, these measures should include lifting environmental levies on electricity for those using heat pumps. Calls to move levies from electricity have grown over the past year, as decarbonising the heating sector continues to be a sticking point in Britain’s transition to net zero.

Indeed, the Climate Change Committee called for levies to be moved into general taxation in its most recent progress report, following on from utilities last year calling gas and electricity levies “outdated”.

Higher levels of grant support for heat pumps and home insulation should also be used to spur uptake, argued the GSHPA, as well as ending the sale of natural gas boilers before 2035.

Modelling from the Centre for Net Zero in May found that the Boiler Upgrade Scheme alone will not be enough to ensure the UK reaches the government’s heat pump installation target – the country is aiming for 600,000 installations a year by 2028 – with the early announcement of a ban on new gas boilers imperative.

“If the UK is to decarbonise heat and switch away from gas boilers, as part of the UK’s journey to reach Net Zero, there is no time to argue and dither anymore – we must do more to promote the environmental and economic benefits of low-carbon ground-source heat pumps to industrial and business customers as well as domestic customers up and down the country,” continued Bishop.

“There has to be a unified effort by politicians, OFGEM, industry and consumer organisations to communicate the benefits and practicalities of switching away from gas boilers to low-carbon heating, including ground-source heat pumps.”

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