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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Construction of the £400m project, due to start this summer, will allow more renewable and low-carbon energy to move onto electricity grid and into homes and businesses, both in Yorkshire and further afield.

The reinforcement will help deliver the government’s Net Zero targets as well as enable a cleaner, more affordable, and more resilient energy system.

Deemed a Nationally Significant Infrastructure Project, Yorkshire GREEN is the first of seven onshore projects proposed by National Grid across England and Wales required to be consented through a DCO.

The project also is part of the Accelerated Strategic Transmission Investment (ASTI) framework established by Ofgem.

National Grid has been engaging with communities and local stakeholders on the project since 2020, including two rounds of public consultation and further localised targeted consultations. Feedback from local stakeholders, communities and wider consultees has helped shape the proposals, and we are committed to continuing this engagement as we work to ensure the project leaves a lasting legacy in its host communities.

Contractors have been appointed.  Morrison Energy Services has been selected to deliver the new overhead line and existing overhead line refurbishment. Murphy will deliver two new substations in Overton and Monk Fryston.  Hyosung and Hyundai will supply transformers to the substations.

Matt Staley, National Grid director of onshore delivery said: “I am delighted after months of consideration the government has granted development consent to build Yorkshire GREEN.

“This marks a major milestone for The Great Grid Upgrade, and as the first project to have been given consent to begin construction, it will help the UK to meet its Net Zero and energy security ambitions, reduce its reliance on fossil fuels and contribute to lower energy bills over the long-term.

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Extra power needed by such clean tech upgrades can mean that the fuse controlling a home’s incoming power would need to be upgraded by the local distribution network operator DNO.

Empowering Octopus’ installers to accommodate such devices overcomes the problem.

The two companies have signed a new agreement, allowing Octopus Energy engineers to upgrade the fuse themselves at the same time as they are installing heat pumps, EV chargers and solar panels in their customers’ homes.

Octopus says the deal removes a step in the process that could add up to 10 weeks to the installation.

As well as running Britain’s transmission backbone, National Grid is the distribution network operator (DNO) for the Midlands, South West England and South Wales. It invests £1 billion every year in its distribution grid.

Following discussions, NG’s DNO has also pre-approved the heat pumps installed by Octopus Energy for connection across their DNO network. The power retailer claims this potentially saves up to five weeks of delays.

The improved process builds on a similar pilot conducted last year between Octopus and UK Power Networks.

Via the 2023-2028 ED2 regulatory settlement, National Grid Electricity Distribution has committed to ensure customers are able to connect to low carbon technologies quickly and easily. Under the deal, the DNO must have its network ready by 2028 to support at least 1.5 million EV chargers and 600,000 heat pumps.

Cordi O’Hara of NGED commented:  “Over the last five years we’ve seen the number of EV chargers installed increase by eight times, and the number of heat pumps triple. These new changes to the fuse upgrade process are part of NG-ED’s commitment to make it even easier for customers to connect low carbon technologies.”

Alex Schoch, Octopus’ head of flexibility responded:  “We have shown that by working together, DNOs and installers can bring heat pumps, EVs and solar into homes faster and cheaper, turbocharging the UK’s move to an electrified future.

“By upgrading fuses alongside clean tech installations, we are not only saving NGED resources, but also giving our customers back valuable time. It’s a win-win that highlights how critical collaboration is on our path to net zero.”

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Replacing high voltage cables between pylons along 50 miles between Bramley, Hampshire and Melksham, Wiltshire will allow them to operate at a higher temperature and thus boost power flows.

New generation projects as far afield as south Wales will benefit, as the NG-ESO begins talks with developers.  Some were previously left to anticipate connections as distant as 2028.

Upgrades to approximately 3000MVA will allow increased flow of electricity over the link.  Engineering improvements will begin next month and last until October 2025.

The Bramley-Melksham upgrade follows National Grid’s recent announcement of accelerating up to 20GW of grid connections across its transmission and distribution networks, the same as six Hinkley Point C nuclear power stations.  Accelerating 10GW of battery storage projects by up to four years is included.

It also builds on pledges this week by the Energy Networks Association to free up 139GW of capacity with operators sharing more information with developers.

National Grid says it is working closely with both the ESO and ENA on their plans to reform the connections process, both of which are key parts of the government’s recently published Connection Actions Plan.

Networks minister Graham Stuart said:   “We recently announced the most radical grid upgrade since the 1950s. The plans will halve the time it takes to build power lines from 14 years to seven, and cut the average delay to connect projects to the grid from five years to just six months.

“This £90 million upgrade to the power network means clean energy projects will be hooked up earlier, boosting our capacity and accelerating our path to net zero and greater energy security.”

RenewableUK’s director of future electricity systems, Barnaby Wharton, said:  “This is a great example of the way the grid is being upgraded to enable everyone to benefit from the vast quantities of electricity we’re now generating from renewables.

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The transnational nukes-to-offshore-wind combine positions itself as Britain’s biggest generator of zero carbon electricity.

Two years ago it took a minority stake in the 23-year old Clacton, Essex based ASHP-maker. Their partnership boosted CB Heating’s skilled workforce fivefold in its first year, training an extra 370 engineers.  Full ownership is expected to yield still more. The purchase price was not disclosed.

As deployment of air- and ground-sourced extractors of low carbon energy lags woefully behind the government’s target of 600,000 per year by 2028, EdF’s move coincides with D-ESNZ’s recent 50% boost to the household pump subsidy.

It now offers householders £7,500 per home ASHP installation.  Extending the Boiler Upgrade Scheme by three years until 2008 is Whitehall’s supporting incentive.

With the Future Homes Standard set to ban installation of gas boilers in new homes after 2024, and a total ban on gas boilers by 2035, both acquiror and acquiree intend today’s consolidation to slash waiting times. EDF wants these to drop by half from their current three to four months.

The deal will also see EdF putting a dedicated team in place to deliver heat pumps to homes.

A major challenge confronting the government’s overarching decarbonisation strategy is a dearth of qualified heat engineers.

According to economic consultancy Nesta, Britain needs 27,000 qualified technicians to meet that target of delivering 600,000 heat pump installations every year by 2028.   At present only 4,500 qualified installers earn a living from heat pumps in the UK,^,compared to more than 150,000 gas safe engineers.

Since August 2022, EdF’s partnership with CB Heating has aided development of the Heat Pump Installers Network (HPIN) Academy, delivering free training nationwide to upskill engineers at every level.

In consequence, heat pump installers under training have risen from 90 experts to 463 now. The Academy has capacity to train 4,000 new heat pump installers every year.

Clayton Browne, managing director of CB Heating, said: “Now we have has the resource to continue to grow our HPIN venture, already the largest network of qualified trained heat pump installers in the UK.

“We plan to train over 1,000 heat pump installers in 2024, meaning a quarter of all estimated heat pump installers in the UK will be a HPIN member.

Philippe Commaret, EdF’s managing director of customers said: “The investment we’re making in the heat pump market is representative of all the work we’re doing to help Britain achieve net zero.

EdF’s rival, Octopus, now Britain’s second-biggest energy supplier by account volume, bought Craigavon -based pump manufacturer RED in April 2022.

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The charge point operator said that the refinancing will help it install more than 500 new charging hubs, covering 3,000-plus new high-power charge points with speeds of up to 350kW.

The funding comprises of £326 million in committed loan facilities, with a further £200m uncommitted accordion facility for future assets – a total of £526m.

The facility consists of a £300m term loan, a £10m working capital facility and a £16m VAT facility.

The package will be undertaken under Gridserve’s Green Finance Framework.

Toddington Harper, founder and CEO of Gridserve, said: “To secure the largest debt raise globally for a privately-owned charge point operator is a remarkable endorsement of Gridserve’s electric vehicle charging network, our ‘sun-to-wheel’ strategy, our fantastic team and our future expansion plans.

“This financing – which was a hugely popular transaction amongst banks, attracting overwhelming market demand – will accelerate our delivery, providing customers further confidence to go electric, and fully charge Gridserve’s mission to move the needle on climate change, precisely at the time when urgent action is so critically required”.

Banks providing the debt are: CIBC, KfW Ipex, Lloyds Bank, MUFG, Natixis, NatWest, Santander and UK Infrastructure Bank.   Santander also acts as the Green Structuring Bank.  Its corporate and investment division advised Gridserve.

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SSEN Transmission’s biggest ever programme of network investment linking ScotWind’s turbines to land has already made 400 new roles in 2022. It’s on track to make 500 more this year, the company says.

Centred in Scotland’s north, the posts are forerunners of SSEN’s planned 9,000-job expansion in the devolved nation, under the gridco’s ‘Pathway to 2030’ blueprint.  South of Hadrian’s Wall, a further 11,000 will follow.

The investment programme’s goals include connecting before 2030 as much as one fifth of Britain’s intended total 50GW of offshore wind, a target endorsed by Westminster & Holyrood.

Several subsea links and grid reinforcements onshore are the core of SSEN’s announced upgrades under the Pathway, needed to meet UK and Scottish government targets for energy security and to fight climate change.

Billions in added value to the UK’s regional and national economies are anticipated to flow from SSEN’s Pathway blueprint.   Analysis by consultancy BiGGAR Economics calculates total likely benefits at £6 billion, including £2.5 billion of direct benefit to Scotland.

Technical jobs at all levels will be created, many of them providing a route for workers shifting their skills out of legacy oil and gas operations.  Roles in customer and stakeholder engagement will accompany switches in  engineering skills.

Ministers either side of the border welcomed SSEN’s commitment.   Graham Stuart MP, Westminster’s energy security minister declared:  “SSEN Transmission’s Pathway to 2030 programme is a significant investment in the future of Scotland and the rest of the United Kingdom.

“This £6.2 billion economic will deliver long-term and well-paid jobs, while helping Britain achieve home grown energy security and an electricity network fit for the future.”

The £10 billion of spending reinforces, says SSE Group, its Net Zero Acceleration Programme (NZAP), presaging still greater investment. As much as £40bn could materialise in the next decade, directly tackling climate change and alleviating the UK’s energy crisis.

Holyrood’s energy secretary Neil Gray MSP spoke up too for SSEN’s plan : “Scotland needs to invest in our grid infrastructure if we are to enable full utilisation of current renewable generation, and to realise the enormous potential of further deployment.

”Infrastructure must be s delivered at the most efficient cost to consumers. Local communities must be fully engaged to derive lasting benefits

“I look forward to the SSEN Transmission Pathway to 2030 Programme progressing at pace”.

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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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