The UK Government currently has no plans to increase the amount of subsidy given to households under the Boiler Upgrade Scheme, Express.co.uk was exclusively told. Lord Callanan, the Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy (BEIS) said if the rates of heat pump installation was falling behind, the Government would consider boosting the scheme to further incentivise households. The Government’s Boiler Upgrade Scheme (BUS) offers households grants of up to £6,000 towards the installation of heat pumps and up to £5,000 for air-source heat pumps and some biomass gas boilers.
Over the past year, the Government has been scrambling to roll out heat pumps at scale, particularly as Russia’s invasion of Ukraine has sent energy bills soaring to record levels due to a restricted supply of natural gas.
Heat pumps have an efficiency rating of over 300 percent compared to traditional gas boilers, which have an efficiency of approximately 92 perent, losing at least 8 percent of the energy through the process of burning fossil fuels.
Another benefit is that heat pumps have a potential working life of up to 20 years, far longer than a traditional boiler, enabling households to cut their carbon emissions by more than 23 tonnes of CO2 over a decade.
However, one of the biggest drawbacks of the technology is that it can be prohibitively expensive, costing an average of £13,000 for installing one.
Thus the Government’s Boiler Upgrade Scheme aims to incentivise more households to install heat pumps by slashing the costs by up to £5,000.
Speaking exclusively to Express.co.uk, Lord Callanan said: “It’s about getting the balance right. Obviously, if you wanted to increase the uptake, you could increase the [BUS] grant amount.
“There are no plans to do that at the moment, we would keep it under review. It’s about getting it right with what is the right subsidy that we need to provide in terms of value for money for the taxpayer to provide the incentive for people to actually use this scheme.
“As you are well aware, heat pumps are much more expensive than gas boilers. We want to increase uptake, we want to bring of cost heat pumps down, and we do that by providing a Government subsidy of £5,000 for Air Source Heat Pumps and £6,000 for Ground Source Heat pumps.
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“We’ll keep it under review, we have £450million over three years, and we’ll review the amount if it looks like the uptake is lagging. We have also helped by removing the VAT from installations as well in the budget last year.
“So far, the scheme is going well, but we’ll keep the amount under review to make sure that we’re getting the right balance between subsidy and value for money.”
This comes as a new paper from the Imperial College of London warned that the UK’s efforts to upgrade homes to combat energy bills and climate change are trailing behind European countries.
The researchers warned that UK residents were heading into winter with some of the least efficient houses on the continent, adding that the Government could do more to help people.
The Government has committed to 600,000 heat pump installations per year by 2028, and to ensure heat pumps are no more expensive to buy and run than gas boilers by 2030.
Lead author Dr Salvador Acha said: “Although these targets are a step in the right direction there is a lack of clarity on how businesses will be supported to invest in sufficient skilled labour across the country to install thousands of heat pumps and revamp homes.
“I fear that the socio-economic inequality of the country will be reflected in widening the south and north divide in terms of quality housing – a national comprehensive effort is needed to ensure these policies benefit all.”
The authors highlighted Sweden and Norway as examples, saying that in Sweden, the widespread deployment of heat pumps has tripled installation since 2000, thanks to a well-developed market helping to reduce costs.
Sweden currently has the highest number of ground source heat pumps per capita in the world, with heat pump sales per 1,000 households reaching 29 in 2021 compared to the UK’s 1.5 in the same year.