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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Manufacturers have invested significantly in green bus innovation with some 13 different zero emission models now available in the UK. More than four in 10 new single- and double-deckers joining British fleets last year were either electric or hydrogen, and analysts predict and the market could be fully decarbonised as early as 2030, if all the right enablers are put in place.

At present, however, the benefits – from improved local air quality and reduced noise pollution to a more enjoyable passenger experience – are unevenly distributed.

Of all new ZEV buses registered last year, Greater London, at 46.8%, accounted for almost half, despite the capital accounting for fewer than one in six new bus registrations of all types.

While government support has enabled some specific cities to invest, uptake outside the capital is far lower. The rest of England outside London took 30.3% of new ZEV buses, while Northern Ireland received 3.3%, just slightly more than Wales, which accounted for just 2.2%.  Ironically Northern Ireland is home to leading manufacturer Wrightbus, based in Ballymena, County Antrim.

Scotland has enjoyed robust levels of ZEV bus uptake, accounting for 17.5% of all new ZEVs reaching UK roads last year.  This is in part due to operators benefitting from funding from the Scottish Zero Emission Bus Challenge. Holyrood’s cash spurs decarbonisation switchovers by smaller operators of scheduled services, and operators providing rural community and home-to-school services

Equally, the national Zero Emission Bus Regional Area (ZEBRA) fund has been instrumental in spurring greater green uptake across the UK. However, the scheme’s lengthy grant application process and narrow time windows for applications mean only the biggest operators with the most resources are successful.

Smaller and rural operators also face a tough challenge due to longer routes and lower passenger numbers, despite the opportunity of mass green mobility helping to boost passenger numbers in semi-urban and rural areas by as much as 65%.

In a new paper Next Stop, Net Zero: The Route To A Decarbonised UK Bus Market, the SMMT sets out the case for a clear timetable to put every region, operator, driver and passenger on the journey to Net Zero.

But the trade body says that timetable must be backed by long-term, accessible support for fleets of all sizes. Passenger levels fell sharply in 2020 as Covid lockdowns took hold. The tight margins faced still by operators as the market recovers dictate that government incentives remain necessary.

The challenge of switching is made steeper – and the need for incentives even more critical – by the higher upfront cost of zero emission vehicles, compared to their predecessors running on fossil fuels such as diesel.

Decarbonising buses also depends on charging & refuelling infrastructure in depots, and establishing the best locations for shared replenishing. Developing this takes time, prompting the trade body to call for smart thoughts and smart actions today.

As Europe’s biggest ZEV market, the SMMT, says Britain needs a strategy to deliver the infrastructure that’s needed as well as incentives required to help operators deliver a mature, functioning ZEV market.

SMMT chief executive Mike Hawes said; “Britain’s bus industry is in a strong position to become the first vehicle sector to decarbonise.

“Reaching that destination, however, requires a clear timetable and appropriately ambitious support. Governments have played a vital role in driving uptake through grant funding, and every region should be supported so that all passengers can enjoy the advantages of going green. Only then will the full benefits of sustainable public transport be realised nationwide”.

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In helping homes replace gas heating with electric devices, the government says boosting the BUS grant to £7,500 over the summer has led to a 57% rise in BUS applications. Today’s moves are intended to accelerate that drive still further.

From green devices standards body the MCS Foundation, the response was positive. Campaigns manager Dr Richard Hauxwell-Baldwin said; “This additional funding is hugely welcome, and follows our campaign to get more government support for the energy transition.

“Heat pumps are the only viable option for decarbonising home heating at scale“, the MCS spokesman asserted. “£1.5bn more announced today will fund an additional 200,000 heat pump installations over four years”.

Chancellor Jeremy Hunt claimed in last month’s Autumn Statement that Conservatives are supporting Britain’s worst insulated homes with support measures totalling £ 6 billion.

Around 200,000 poorer households will benefit most, D-ESNZ claimed today, among a wider one million homes set to share the ministry’s claimed total investment.

Besides £1.5 billion more for boiler scrappage, the ministry’s breakdown includes the following sums for helping homes and businesses:

• £1.25 billion more for the Social Housing Decarbonisation Fund, supporting retrofitted insulation in 140,000 social homes
• granting £500 million to a new local authority retrofit scheme, allocated to support up to 60,000 low-income and cold homes, including those off the gas grid,
• £485 million added to the Green Heat Network Fund, allocated to help 60,000 homes and buildings tap into affordable, low carbon heating through new heat networks
• allocating £45 million to the Heat Network Efficiency Scheme, upping the performance of around 100 existing heat networks
• £225 million more for the Industrial Energy Transformation Fund
• Launching in 2025 a new £400 million energy efficiency grant targetting better insulation

Hunt commented today: “Investing in energy efficiency combined with energy security is the only way to stop ourselves being at the mercy of international gas prices, one of the main drivers of inflation”.

Energy secretary Claire Coutinho echoed the Chancellor.  “Cutting energy bills is my top priority. Today’s funding will help those who are most in need and keep around a million more families warm during winter.

“Everyone deserves to live in a warm, energy efficient home. We have already made excellent progress with nearly 50% of properties in England now having an Energy Performance Certificate of C – up from just 14% in 2010.

“This funding will help us go even further and improve 200,000 cold, low income and social homes”.

Mark Sommerfeld, the REA’s Deputy Director of policy welcomed more BUS funding.

“Since the grant level was raised this year, as called for by the REA, it is positive that the scheme has become a more attractive offer that actively enables households to invest in heat pumps, helping to decarbonise their properties. This will drive up deployment rates, which remain well behind what is needed to keep the UK aligned to heat decarbonisation targets.

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Yorkshire’s largest city has opened Britain’s first predominantly solar-powered park’n’ride car park at Stourton, its canopies topped with 1.2MWp of PV modules over 480 parking bays, plus a 950 kWh battery. The ensemble is set to save as much as 471 tonnes of CO2e every year, assuming 2022’s rates of occupation.

Israeli technologists SolarEdge provided Stourton’s modules & inverters, 950kWh battery and EV charging infrastructure.  They promise 852 MWh of clean power every year. On-site use of the power includes the depot’s lighting, CCTV and heat for the waiting room.

By load shifting using the battery, grid import to the site is expected to be zero for most of the time.

With the storage set-up in operation, around 12% of the site’s generation will be exported to the grid.  The bulk will be stored, and used to help power the facility outside daylight hours.

Besides power, the solar canopies above Stourton’s bays provide shelter from the elements for Yorkshire shoppers.  The park’n’ride lies two miles south of Leeds’ city centre, next to the A61 and M621.

Two years ago, Stourton debuted solar generation in UK municipal parking, using clean power to re-charge electric shuttle busses that make the frequent 2 mile trip to Leeds’ shopping centres.

Stourton’s extension this month is part of Leeds City Council’s strategy to hit carbon zero by 2030, on the way cutting congestion & pollution in its centre.

The project was partially funded by the Department for Transport and with a grant awarded by the European Regional Development Fund.

Installers Evo Energy chose a SolarEdge DC-optimised system to compliment Stourton’s curved solar arrays. Conventional string inverters, Evo reasoned, would have struggled to overcome energy loss due to module-level mismatch.

Each pair of solar modules is connected to a SolarEdge Power Optimiser, enabling every module to operate at its maximum efficiency, regardless of its neighbours. Shading, uneven panel degradation and heavy soiling – all the enemies of old-style string arrays – are all thus avoided.

Optimising external aesthetics, nine SE82.8K and one SE17k SolarEdge inverters are located inside the terminus.  The configuration permits a touch-safe, non-lethal 1V contact with the canopies, permitting easy routine maintenance. A SolarEdge Firefighter Gateway allows the whole system to be shut down just as easily.

“This project is a sustainable example for other cities in the UK to follow”, commented EvoEnergy’s principal consultant Jonathan Roper.

“The Stourton site highlights how a project can positively impact a community, the local economy, and businesses throughout the city by enabling renewable energy powered transportation and enhancing the volume of transport links.

“It’s a great step forward in sustainable electrification of transport, while overcoming local grid limitations”.

Legislation in France now compels larger out-of-town supermarkets to install solar canopies above their parking bays.

In May British energy minister Graham Stuart and trade body SolarEnergyUK announced a purely voluntary, time-limited Solar Taskforce, supposedly incentivising the installation of more arrays above car parks and on roofs of commercial buildings.

No major commercial property owner is yet to be named among the Taskforce’s corporate members. The government-industry venture is scheduled to wind itself up in February, after only ten months of existence.

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As reporting overseers of the first ten months of the government’s high-profile drive to equip English & Welsh homes with heat pumps in place of carbon-emitting boilers, Ofgem revealed this week that under 10,000 households, – fewer than a third of the 30,000 budgeted to benefit –  had received their £5,000 subsidy voucher.

From the £150 million budgeted for the first of the BUS’s three years, only £60.3 million worth of vouchers had been issued by April, Ofgem’s numbers show.  The scheme’s unspent £90 million first year balance will now be returned to the Treasury.

“It takes a certain type of genius to fail to give away £150 million of taxpayers’ money,  said Mike Foster, CEO of the EUA.

“This wretched scheme looks like it has done just that”.

“When will the Government actually listen to the people, the majority of whom simply cannot afford a heat pump, subsidised or not?”

“The scheme is simply a taxpayer handout to those who don’t need it, to keep the secretly funded heat pump lobby quiet,” Foster alleged.

“It does little for carbon saving compared to investment on insulation. It does not help people keep bills low. It takes from the poor to give to the wealthy and it is an embarrassment of a policy.”

“More taxpayer-subsidised heat pumps have probably been fitted in Cornish holiday homes than the whole of Britain’s second city, Birmingham”, Foster speculated.  “That is shameful.

“What makes this profligacy even worse is that insulation measures could save more carbon, keep bills down and provide a sound economic investment for the Treasury.”

“With people still hurting from high energy bills, insulating the homes of those most in need should be the priority”,  Foster went on, ”not giving hard-earned taxpayers’ cash to those who were going to buy a heat pump anyway. It’s utterly wasteful.”

The EUA chief’s vituperation today adds to the chorus of sustained criticism levelled at the Boiler Upgrade Scheme, brought in during Kwasi Kwarteng’s tenure atop the energy ministry.

Legislators, trade bodies & learned observers have weighed in.

In July, three months after the BUS’s launch, the Ground Source Heat Pumps Association reported enquiries for pump installations had fallen, not risen.

As recently as February the House of Lords environment committee warned the BUS was under-performing, alleging poor publicity for it from government, a shortage of trained installers and too little independent advice for householders.   The Lords also asked for the scheme’s unspent first year allocation to be rolled over into its second year.

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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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Uptake of the Boiler Upgrade Scheme is lagging at less than half the intended rate since its launch in May, the Lords’ Environment & Climate Change Committee says. It calls on ministers for urgent improvement, including carrying almost £80 million of unspent cash from its first year of budget into the second.

Low public awareness and a lack of trained technicians dog the scheme, the committee found.

The scheme offers £5,000 grants to qualifying homes seeking to upgrade heating from conventional gas boilers to electric heat pumps, in practice overwhelmingly air-sourced.  The Johnson administration expected the scheme to notch up 20,000 home instals for each of its three years.

Instead, figures for the BUS’s first nine months show that upgrades are running at an annual rate of only 10,000 or so.    The committee is asking that the unspent share of the full £150 million allocated for the subsidy’s first year be kept available into the second, and not clawed back by chancellor Jeremy Hunt.

At less than 7,700 completed instals before this month, completed replacements are running significantly behind the government’s release of funds to billpayers, reinforcing widely held fears among trade bodies about a shortage of qualified technicians.

With 17% of the UK’s greenhouse gas emissions coming from homes, the committee’s chair Baroness Parminter reminds ministers in a letter today that the transition to low-carbon heat is fundamental to Net Zero.

“The government must quickly address the barriers we have identified to a successful take-up of the Boiler Upgrade Scheme in order to help grow the take up of low-carbon heating systems. It is vital they do so if we are going to meet our Net Zero ambitions,” she writes.

Among those barriers, says the committee, are the government’s inadequate promotion of the scheme, the shortage of installers, and insufficient independent advice for householders.

Even with the grants, heat pumps remain too expensive for even middle-income homes, the peers allege.  As chancellor, Rishi Sunak scrapped VAT on heat pumps & low carbon home power in last March’s budget.

Last month British Gas offered purchase and installations of air source pumps starting at £3,000.  Last week Octopus undercut its rival, offering £2,500 for an entry level system. Most homes would pay only £4,000 for a pump with a 20-year life, said the supplier, double a conventional boiler’s.

Misleading messages including from the Government over hydrogen’s long term suitability to heat homes, adds to bill payers’ confusion, says the committee.

Fears over running costs could also deter pump take-up, say peers. Progress is urgently needed through electricity market reform to ensure they are affordable.

Methods for awarding Energy Performance Certificates need revision, their Lordships recommend, to properly reward households seeking to switch to low-carbon heating. Planning laws should be relaxed, so pumps can be sited closer to neighbouring homes.

Their pleas echo early awareness among tradespeople of the BUS’ failings. As early as July installers’ groups were calling for a rethink.  The following month, the Heat Pump Association called for radically expanded training to boost numbers of technician from 3,200 in 2021, to over 50,000 this decade.

More scathing criticism of the BUS, and of the peers’ desired improvements, came today from the century-old Energy & Utilities Alliance, representing trade bodies in water & industrial heating and equipment manufacture.

EUA CEO Mike Foster, “While we agree the Boiler Upgrade Scheme is failing, we want to see it scrapped, rather than see the recommendation of the committee to double-down on the flawed policy be supported.”

“Giving a £5,000 taxpayer handout to the well-off is immoral and simply cannot be justified when millions are living in fuel poverty and we all face a 20 per cent increase in our bills from April”, said the EUA head.

The Heat Pump Federation was more supportive, echoing the Lords’ strictures.

“The committee’s findings chime precisely with what heat pump installers and consumers are telling us”, said Bean Beanland, the HPF’s director of growth & external affairs.

“We are delighted that the House of Lords Environment and Climate Change Committee finds that significant changes must be swiftly made to give the heat pump industry the opportunity to deliver on the original policy intent”.

“Heat pump take-up across the country is increasing, as is industry investment, but the BUS’s first year of operation has been challenging for all the reasons outlined by the Lords Committee,” the HPF spokesperson went on.

Improvements to the BUS, plus early Whitehall action on the fair pricing of increasingly low carbon electricity, would prime investment & training needed for the growth anticipated due to the Future Homes Standard expected in 2025 and the consulted-on ban in 2026 of replacement oil boilers in homes off the gas grid.

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