Heat Pump Association CEO Reacts to Boiler Upgrade Scheme Year 2 Budget Underspend.

The Boiler Upgrade Scheme has been offering households a significant grant to help with the upfront capital cost of installing a heat pump for the last two years. Funding has been set aside to support this scheme until 2028.

Commenting on Ofgem’s statistical release of the Year 2 figures for the Boiler Upgrade Scheme (BUS), Heat Pump Association CEO, Charlotte Lee said:

‘Whilst it is disappointing to see an underspend of the BUS budget for the second year running, this news should be set against the backdrop of the 125% growth in UK Heat Pump Sales over the past 6 years.

The 50% BUS grant uplift to £7,500, which came into effect in late October 2023, and the recently announced changes to the BUS to streamline the application process are both very positive and should support a continuation of the positive trajectory that we have recently seen.

Since the grant uplift, we have witnessed a steady and consistent increase in applications to the scheme averaging just over 2,000 applications each month between November 2023 and March 2024.  If this end-of-year trend continues, we anticipate that the Year 3 budget (£150m in 2024-25) will be spent in full.

However, upfront cost is not the only barrier that needs to be overcome if we are to see a true acceleration of heat pump deployment in the UK.

We must see swift and meaningful action taken by the Government to rebalance the price of electricity relative to gas to ensure the lowest carbon heat is the lowest cost heat.  In addition, the introduction of the Future Homes Standard in 2025 as planned and a clear timeline for the phase-out of fossil fuel heating in homes is needed to sure up the supply chain and provide investor confidence.’

Read Ofgem’s statistical release here: https://www.ofgem.gov.uk/publications/bus-monthly-scheme-update

View the HPA’s UK Heat Pump Sales data here: https://www.heatpumps.org.uk/statistics/

Read the Government’s proposed changes to the Boiler Upgrade Scheme here: https://www.gov.uk/government/consultations/proposed-amendments-to-the-boiler-upgrade-scheme-regulations

Notes to Editors:

For media inquiries, please contact:

Olivia Smalley

Head of Policy and Communications

Email: Olivia.smalley@thehpa.org.uk

About the Heat Pump Association:

The HPA is the UK’s dedicated voice for the Heat Pump Sector, driving widespread deployment of heat pump technology throughout the UK. Our membership includes the country’s leading manufacturers of heat pumps, components, and associated equipment as well as energy companies, certification bodies, installers and training providers.  We currently represent over 80 member organisations working in the heat pump sector, with our members representing around 85% of the volume of heat pumps sold in the UK market.