The UK Government has allocated £15 million in funding to 24 projects aiming to reduce the cost and difficulties in installing heat pumps.
Being provided as part of the government’s £60 million Heat Pump Ready programme, the additional capital will support the deployment of low-carbon heating technology and support the targe of installing 600,000 heat pumps per year by 2028.
This also supports the governments £450 million Boiler Upgrade Scheme which aims to increase the installation rate of low-carbon heating technologies such as heat pumps via grants of £5,000 from April 2022.
However, a recent survey from the Ground Source Heat Pump Association (GSHPA), found that the government’s £450 million Boiler Upgrade Scheme is yet to deliver increased demand for heat pumps.
The government also planned to work with industry to meet the aim of heat pumps costing the same to buy and run as fossil fuel boilers by 2030. Cost reductions of between 25 – 50% by 2025 are expected as the market expands, and technology develops.
These targets still apply to the latest funding with the government allocating it to “reduce costs and increase the performance of domestic heat pumps, minimise disruption in homes during the process of installation and develop financial models that support the deployment”.
A list of the 24 projects set to receive funding can be found here.
“In light of rising global gas and oil prices, getting low-carbon heating technology into homes is a priority for this government as it will help households ditch the costly fossil fuels that are driving up bills,” said Lord Martin Callanan, business and energy minister.
“Heat pumps are a proven, reliable technology that uses cheaper renewable energy produced in the UK. We are already bringing costs down through the Boiler Upgrade Scheme and slashing VAT to zero, but by finding innovative ways to make them even cheaper and easier to install, we will help more homes see the benefits even quicker.”
The £15 million stream 2 funding supports 37 small and medium enterprises across the 24 projects in England and Scotland, will support the creation of more than 300 jobs and will leverage £6.5 million of private investment.
Stream 2 of the Heat Pump Ready programme comes alongside streams 1 and 3. Stream 1 provides over £2 million of funding across 11 projects that are developing feasibility studies for ways to increase the deployment of domestic heat pumps within their local area.
In their applications for Phase 1, project teams have estimated a potential cost reduction of at least 20% could be achieved through coordinated deployment, the government said.
This new funding will be crucial for the development and installation of heat pumps, an area that has been stalling. A report commissioned by Greenpeace UK recently found that governmental targets for energy saving upgrades are “woefully off track” with 2020 heat pump sales per household the lowest in Europe.