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”.

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Launched in May, the £450 million drive has registered below half the replacements it was budgeted for. Last month a House of Lords committee slammed the initiative’s low-key promotion by Whitehall

Data from Google Trends collected by the advisory firm confirms strong consumer interest in ‘air source heat pumps’ over the last twelve months, they say, but minimal searches for the ‘boiler upgrade scheme’ or ‘heat pump grant’.

This lack of awareness around the scheme has resulted, the Eco Experts claim, in thousands of UK households missing out on its £5,000 grants, an upgraded eco-friendly heat source, and potential cuts energy bill costs. On average, they could have saved  50% of upfront costs for an average air source heat pump.

Searching nearly a year’s worth of Google Trends data, the advisory group found keen interest around ‘air source heat pumps’ last year, with UK searches for the term hitting peak popularity – 100 of Google Trends datfa- from in the week ending 17 December.

Yet interest around the ‘boiler upgrade scheme’ during the same year was significantly under-powered, with searches for the scheme peaking at a mere 15 – see chart – in April’s second week.

The search term ‘heat pump grant’ also registered low volumes. Its highest score was 28 – see chart – in the last week of March.

In 2022, search popularity for the ‘boiler upgrade scheme’ and ‘heat pump grant’ reached their highest scores before the government scheme had even launched, yet searches for ‘air source heat pumps’ peaked several months later. This data indicates, say the Eco Experts, that searches for the scheme never achieved the levels of interest reached by online searches for air source heat pumps.

“With the UK cost of living crisis leaving nearly 40% of people with no money at the end of the month, coupled with the threat of rising energy bills in April, UK homeowners are now in urgent need of financial support in regards to their energy usage. An air source heat pump will typically save £6,700 over its lifetime compared to a gas boiler, the Eco Experts allege.

The UK government launched its Boiler Upgrade Scheme in May 2022 to help households cut the cost of their energy bills, while encouraging sustainable living to help Britain achieve its net-zero ambitions.

But during the first five months of its launch, the scheme fulfilled just 33% of the heat pump installations it needed to reach its overall target. Data from the Microgeneration Certification Scheme shows that the number of heat pump installations has dropped  since the scheme began.

For the Eco Experts, researcher Josh Jackman commented: “The government has failed the public and the planet by refusing to publicise its own Boiler Upgrade Scheme in a year when consumer interest around air source heat pumps has reached peak popularity.

“This new data highlights the government’s two-faced approach to its climate targets: introduce a grant to tick a box, then neglect it completely”.

After ending the home-targeted Renewable Heat Incentive in 2022, this deliberate abandonment of the Boiler Upgrade Scheme takes the government’s record on providing UK households with energy-saving and affordable technology to a new low”.

To equip UK homeowners with tools to assess whether air source heat pumps could help to reduce their energy bills, the Eco Experts offer their own Air Source Heat Pump Cost Calculator.

In line with the government scheme, the group claim their tool instantly provides homeowners with the total average cost for a heat pump installation, and how much of their carbon footprint could be reduced.

Eco Experts researcher Jackman shares five tips for homeowners looking to install an air source heat pump:

• Octopus are installing ASHPs for as little as £2,500 when supported by a Boiler Upgrade Scheme grant. British Gas has promised to match any price.
• Air source heat pumps typically last 20 years, double the life of a gas boiler.
• Professionally servicing of a heat pump serviced is needed only two or three years.
• The average home will need to replace one-third of its radiators with ones 2.5 times bigger.
• Extra insulation and underfloor heating are worth considering, when maximising a new heat pump’s full potential.

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Tower Hamlets, the City of London and Hackney take places one, two and five in a ranking of localities whose homes score energy performance ratings averaging Band C and higher.

Southwark, ranked in seventh place, and Greenwich, tenth, make up the capital’s contribution to high EPC achievement.

Researchers commissioned by boiler installers Boxt calculated the rankings.  Engineers Robert Bosch have a minority stake in the six year old Leeds-based start-up.

Analysts took a snapshot of borough-by-borough home efficiency averages, as registered by the EPC’s eight-step grading.

Originating out of an EU directive passed by the EU Commission in 2002, EPCs were introduced in England and Wales in August 2007.  Properties are assessed usually only when a property changes hands or, as with the Feed-in-Tariff subsidy for solar PV, when a roof-top system was installed.  The FiT closed for new entrants in March 2019.

Heroes and villains

EPCs covering rented homes expire after ten years.  An EPC assessment is required when a property is sold.

If the top ten including those five London boroughs are Britain’s hero localities, then England’s north west and south Wales provide the villains.

Pendle, Gwynedd, Burnley and Blackpool lead the table of worst-insulated homes, on Boxt’s evaluation. None of that bottom ten has an average EPC “C” share for their homes higher than 29%.  Pendle averages a pitiful 20%.

An inquest in November recorded how two-year-old Awaab Ishak died in December 2020 from respiratory illness caused by mould in the poorly ventilated, poorly insulated one-bedroom flat where his parents lived in nearby Rochdale.

Boxt’s research further purports to quantify by how much a home’s sale value can be enhanced, by stepping up one EPC grade.

If a given council’s local housing stock records an average of 20% to 29% of homes at grade C or better, then improving the average to between 30% to 39% can increase the locale’s home value by as much as 30%, Boxt’s analysis claims.

More on the assessment and its methodology here.

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