The Boiler Upgrade Scheme has come under fire in the Committee on Climate Change’s latest progress report to Parliament, stating that the UK is falling short of its heat pump installation targets, largely due to failure to reduce costs for consumers, train up the installer base, and implement energy efficiency measures like insulation.
Download the report ‘Progress in reducing emissions’ here.
The scheme, launched in May of last year, had a slow start and is only on track to deliver 13,500 installations in 22/23, just 45% of its potential. The government says it is ‘firmly committed to making the UK one of the largest markets in the world for heat pumps’, but in comparison to neighbouring countries, the UK ranked 21st out of 21 for per-capita installations of heat pumps in 2022 and was only 11th out of 21 for total volume of installations.
Capital costs are a significant barrier, according to the report, which says BUS grants cover only around 39% of the average cost of an ASHP. However, inflation is eroding the value of this over time, weakening the grant as an incentive for homeowners. Currently, a heat pump installation can cost £10,000 compared to a few thousand for a new boiler.
A lack of trained heat pump installers and skills are also a concern, as a skilled workforce is needed to deploy low-carbon heat and retrofit homes at the required rate. The report says the number of trained heat pump installers is significantly off track, which suggests that supply chains and workforce upskilling are not scaling up as they should.
Earlier this year, the Lords Environment and Climate Change Committee issued similar warnings, saying that that if the current take-up rate continues, only half of the BUS budget will be used to help households switch to low-carbon heating systems, and a healthy market of installers and manufacturers will not be in place in time to implement low-carbon heating policy measures smoothly. Therefore, the government’s 2028 target of 600,000 installations per year is very unlikely to be met.
Industry reaction to the CCC’s report has been to call on government to go further to incentivise the uptake of heat pumps.
Henk van den Berg, strategic business manager of heating and renewables at Daikin UK:
“The UK’s strategy to encourage renewable heating technology uptake has been too weak for too long. Nothing is more important than driving the nation’s transition away from harmful gas boilers, creating green jobs and a green supply chain in the UK.
“But we’d like to see government extend its subsidies to cover hybrid heat pumps, which can be a helpful transition step for households looking to embrace new technology. This will further stimulate demand and, in turn, incentivise gas boiler manufacturers to accelerate their diversification into heat pumps.”
Martyn Bridges, director of technical services at Worcester Bosch:
“The Climate Change Committee report expresses significantly less confidence compared to last year’s assessment for the UK to meet its 2030 targets of reducing emissions by 22% over the next 7 years. The cost-of-living crisis means that for many UK households, their priority is their bottom line at the end of each month as opposed to switching or upgrading appliances – unless it’s absolutely necessary. This coupled with the significant increase in mortgage rates means that much of the UK public will be reluctant to borrow more money to make the switch to heat pumps and other greener heating solutions. Both of which are understandable reasons why greener heating technologies may be slow on the uptake from the consumer’s perspective.”
Phil Hurley, MD of NIBE Energy Systems:
“The CCC’s Progress Report has confirmed, as expected, that heat pumps are being rolled out far too slowly here in the UK. Despite the ambition to get to a place where 600,000 heat pumps are being rolled out every year by 2028, we are reminded yet again that we are at risk of missing this target without further policy support from government.
“As great as it has been to have seen commitments this year to address some of the challenges to deployment, it is critical that policy commitments from the Government are implemented, including the rebalancing of energy levies to reduce heat pump running costs, and that more support is provided to consumers.”
Charlotte Lee, chief executive of the Heat Pump Association:
“The Climate Change Committee’s report leaves no room for doubt. The UK’s progress in heat pump installations, cost reduction, and trained installers is alarmingly off-track to meet heating decarbonisation targets. To switch the dial on progress, we need swift and decisive action from the government to introduce the Future Homes Standard, provide early clarity of a date for the full phase out of 100% fossil fuel boilers, and take urgent steps to reduce the price of electricity.”
Rt Hon Philip Dunne MP, Environmental Audit Committee Chairman:
“The CCC’s latest report makes for concerning reading and should serve as a wake-up call to Ministers. While the government has indicated the ‘what’ it intends to deliver, there remain gaps in the ‘how’ to achieve through policy levers, leaving stakeholders at a loss to judge whether the UK is properly on track to meet its net zero commitments. This risks not creating sufficient confidence for investors looking to support the net zero transition in the UK: the current demand signals to investors lack clarity and consistency.”
