Britain’s installation of heat pumps to replace fossil-fuelled boilers is at last showing signs of speeding up, bringing expressions of relief from suppliers today.
Now offering £7,500 to homes that strip out old gas-fired heating, the government’s Boiler Upgrade Scheme has appeared to under-perform in the two years since it opened to voucher applications. Funding of £450 million for the BUS is approved by D-ESNZ until next year.
But figures released today by the ministry show a 93% near-doubling year on year last month of applications for the scheme.
By the end of April, a total of 40,259 applications for BUS re-imbursement had reached the ministry during the two years of the scheme. All but 4% were for air-sourced heat pumps.
Raising the BUS grant in October by half to £7,500 seems to have sped up allocations. Applications for cash to redeem vouchers underpinning installations rose last month by 57%, compared with April 2023. Vouchers issued towards costs rose too over the same period, up 69% to just under 1,800 last month.
All told, just over 25,000 home boilers have been replaced under the BUS, today’s figures show. That appears still to lag ministers’ expectations. When announced in 2021, the BUS set a target of 600,000 replacements by 2028.
Average costs in the market of a system redeemed during the BUS’s two years has been £13,150 for an airsource pump and £25,00 for a ground source pump, the figures show. Both values include the grant value.
Data released by Ofgem also shows that there have been more than 40,000 applications in total, with the scheme having paid out over 25,000 grants, with more than £148 million issued.
Rural homes account for 57% of all pump installations paid for under the BUS. 54% were on the gas grid.
From Swedish pump manufacturer & installer Aira, UK chief executive Daniel Särefjord acknowledged how the government’s raising the BUS grant to £7,500 had put wheels under the market.
“This helping hand has raised awareness of the benefits of innovative heat pumps”, said Särefjord, “such as lower heating costs, greater energy security for the UK and a 75% reduction in heating-related carbon emissions and air pollution in comparison to a domestic gas or oil boiler.
“After the election”, the Aira boss continued, “I hope the new government will work closely with the British heat pump sector to meet our climate commitments, decarbonise homes and secure a fair deal for UK residents.
“In the next parliament, our much-needed energy transition will depend on MPs scrapping planning policy red tape, rebalancing the taxes and levies on electricity and gas, as well as continuing and progressing the nation’s subsidy offering.”
Ministers point to pricing moves from some energy retailers to make heat pumps more attractive still. Octopus Energy and British Gas both offers complete heat pump installations from £500.
Some offer tariffs designed specifically to work with heat pumps. Octopus’s Cozy electricity tariff can save heat pump users an estimated £96 compared with a standard flexible tariff. Ovo’s Heat Pump Plus tariff allows customers access to run a pump on a specialist tariff fixed at 15p/kWh.
“These latest numbers show that for more and more families, the switch to a heat pump is starting to make financial sense”, said energy secretary Claire Coutinho.
“Our plan is to give families a helping hand, rather than forcing them to make expensive changes before they are ready”.
