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£1.5bn boost for UK heat pumps

UK: The UK government has allocated an extra £1.5bn for the Boiler Upgrade Scheme (BUS), as part of a £6bn scheme to cut energy use and bills in UK homes. 

The financial boost, which applies from 2025, comes after the government’s recent uplift of the BUS heat pump grant scheme to £7,500 per installation. The 50% increase announced in September is seen as the reason behind the recent 57% increase in applications.

The scheme, which is available in England and Wales, provides financial support for families to switch from fossil fuel heating systems to a heat pump.

A further £400m energy efficiency grant, set to launch in 2025, will also enable households in England to make impactful changes such as upgrading to bigger radiators or implementing better insulation.

“Today’s unveiling of a further £1.545bn for the Boiler Upgrade Scheme from 2025-2028, among other initiatives, reflects a commitment to driving low-carbon heating, reducing carbon emissions and assisting households in England and Wales to transition to heat pumps,” the UK’s Heat Pump Association (HPA) said in a statement.

“It shows a clear commitment to supporting the deployment of heat pumps and is equivalent to a 240% uplift in current annual funding,” said the HPA’s chief executive Charlotte Lee. “Whilst the boost for the future BUS is very welcome, we would like to see a firm commitment from the government to increase the 2024-2025 BUS budget which remains at £150m and at that level, risks restricting growth in the market during this time.”

Greg Jackson, CEO of Octopus Energy said that his company was planning on hiring two thousand new engineers next year to try to meet rocketing demand. “This increased certainty from government enables us to invest with confidence and will unlock cheaper, cleaner heating for the UK,” he said. 

“It’s encouraging to see additional investment in the BUS, though there is still much to be done,” commented Daniel Särefjord, CEO of Aira UK.

“Heat pumps have been heating Scandinavian countries for decades and will be the solution to Britain’s energy crisis. The government recently committed to removing planning policy barriers, reforming EPC’s and tackling the unit costs of gas and electricity and if we can see these policy changes through, heat pumps will have a bright future in the UK,” he added.

Conservative party MP Philip Dunne, the chair of the Environmental Audit Committee, welcomed the government announcement after previously stressing the need for additional funding. “This significant increase in allocation of funds to this scheme is therefore very welcome,” he said, today. “It provides visibility and greater confidence to households and the supply chain that funds will be available over the years 2025 to 2028.

“Low-carbon heat pumps remain a crucial tool in the UK’s mission to decarbonise households and businesses, but at current costs the public can only make the most of them if they get the right financial support.

Related stories:

UK heat pump installations rise again13 December 2023
UK: The number of heat pump installations rose again in 2023 with more than 37,000 air-source and ground/water-source installations, up from 30,000 in 2022. Read more…

BUS grant boosts UK interest in heat pumps30 November 2023
UK: A sharp 173% month-on-month increase in boiler upgrade scheme (BUS) applications in October has been attributed to the government’s increase in the grant to £7,500. Read more…

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