Heat pump grants worth £5,000 to help replace gas boilers

Homeowners in England and Wales will be offered subsidies of £5,000 from next April to help them to replace old gas boilers with low carbon heat pumps.

The grants are part of the government’s £3.9bn plan to reduce carbon emissions from heating homes and other buildings. It is hoped no new gas boilers will be sold after 2035. The funding also aims to make social housing and public buildings more energy efficient. Experts say the budget is too low and the strategy not ambitious enough.

Ministers say the subsidises will make heat pumps a comparable price to a new gas boiler. But the £450m being allocated for the subsidies over three years will cover a maximum of 90,000 pumps. Mike Childs, head of science at Friends of the Earth, said the number of heat pumps that the grants would cover “just isn’t very much” and meant the UK would not meet its aim of installing 600,000 heat pumps a year by 2028.

“Investment will drive down the cost of heat pumps, and technical innovation plus skills training is a part of this, but so is scale. These grants will only incentivise the best-off households.”

Greenpeace UK’s climate campaigner, Caroline Jones, said the government needed to provide more money to speed up the switch from gas boilers to heat pumps. “A clearer signal would have been a phase-out of new boilers before 2035,” she added.

Jonny Marshall, senior economist the Resolution Foundation, a think tank focusing on poverty, said the plan meant the UK would struggle to meet its goal of cutting emissions from homes in half by 2035. The UK has committed to reduce its greenhouse gas emissions to net zero by 2050.

But a group of experts that advises the government says Boris Johnson’s government has credible policies in place to deliver only about a fifth of this cut.

Helen Selman lives with her husband and two children in Chippenham. When they moved into a 1930s semi, they knew they wanted to undertake home improvements, an upgrade to the heating system and an extension. “It was not cheap,” she said. “But because we were doing everything else, and because this was going to be our forever home, it made sense.”

Helen chose an air-source heat pump but alongside it, they had a specifically designed insulation upgrade, new radiators and brand new underfloor heating. “With a heat pump, the problem is that you have to make sure that your house is as well insulated as possible,” she explained. “We already had double or triple-glazing, we had insulated walls, we were upgrading the lofts.”

To help with the project, Helen and her family used the old Renewable Heat Initiative funding and appointed installers Grant UK to oversee the whole project. “The RHI money will pay back quarterly over seven years and will go quite a long way to covering the costs. “It’s been definitely worth the bother,” Helen said.

But she admitted that without their own plans to extend and the added bonus of government cash, it might not have happened. “Without an incentive, there are few people who have the cashflow or the passion to do this,” she said.

Heating buildings is a large contributor to the UK’s overall greenhouse gas emissions, representing over a fifth of overall emissions, so there is pressure on the Heat and Buildings Strategy to deliver effective reductions.

It comes as the government prepares to outline its overarching strategy for how the UK will reduce its dependency on fossil fuels and achieve sharp reductions in emissions over the next couple of decades.

Business and Energy Secretary Kwasi Kwarteng said the grants to support the adoption of heat pumps, available from next April, would play a role in that, by helping to bring down the cost of the relatively new technology by 2030.

Currently, an air source heat pump costs between £6,000 and £18,000, depending on the type installed and the size of a property.

“As the technology improves and costs plummet over the next decade, we expect low-carbon heating systems will become the obvious, affordable choice for consumers,” Mr Kwarteng said.

“Through our new grant scheme, we will ensure people are able to choose a more efficient alternative in the meantime.”

While homeowners will be encouraged to switch to a heat pump or other low-carbon technology when their current boiler needs replacing, there is no requirement to remove boilers that are still working, the government emphasised.

Writing in the Sun, Prime Minister Boris Johnson said “the Greenshirts of the Boiler Police are not going to kick in your door with their sandal-clad feet and seize, at carrot-point, your trusty old combi”.

Mr Johnson also sought to reassure voters about the government’s ambitions by stressing that the costs of low-carbon heating systems would go down over time while their introduction would help create thousands of new job opportunities.

Heat pumps extract warmth from the air, the ground, or water – a bit like a fridge operating in reverse. They are powered by electricity, so if you have a low-carbon source of electricity they provide greener heating.

One energy firm, Octopus Energy, said it expected homeowners would initially contribute around £2,500 to the cost of installing a heat pump, roughly equivalent to the cost of a new gas boiler. The government subsidy would cover the rest of the cost.

But many houses will require an upgrade to their energy efficiency, including insulation, before installing one.

The bulk of the £3.9bn funding spread will be invested in decarbonising public buildings, insulating and installing new heating systems in social housing and for those on low incomes, and helping to provide clean heating networks for homes that are not suitable for heat pumps.

As well as subsidies for low-carbon heating, it includes:

Independent climate think tank E3G said that setting the phase-out date for new fossil fuel boilers was “a world-leading achievement” and the pledge to reduce heat pump costs by 2030 was to be welcomed.

However, the funding was insufficient to achieve the government’s goals on reducing emissions, programme leader Pedro Guertler said.

“On energy efficiency alone, the public investment announced today falls £2bn short of what was pledged in the Conservative manifesto to 2025,” he said.

In all, there would need to be a further £9.75bn invested over the next three years, he said, to meet ambitious commitments on reducing emissions.

“It’s challenging, but necessary, achievable and a great investment for people, jobs, skills and manufacturing,” he added.

Ed Miliband, the shadow business secretary, described the strategy as “meagre, unambitious and wholly inadequate”, adding that Labour had pledged to spend £6bn a year on insulation and low carbon heating.

The Liberal Democrats described the heating plan as “a kick in the teeth for families across the country facing soaring energy bills this winter”.