£1.5 billion of additional funding allocated to the Boiler Upgrade Scheme

The government has announced that a further £1.545 billion has been allocated for the Boiler Upgrade Scheme from 2025-2028.

This, 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.

Furthermore, a new £400 million energy efficiency grant, set to launch in 2025, will enable households in England to make impactful changes such as upgrading to bigger radiators or implementing better insulation- more details to follow. This grant, coupled with the proposals outlined in the Future Homes and Building Standard, consultation, reinforces the government’s commitment to ensuring that all homes are energy-efficient and reduce carbon emissions.

Other notable announcements include:

 A new local authority retrofit scheme, allocated £500m to support up to 60,000 low-income and cold homes, including those off the gas grid.

  • The Social Housing Decarbonisation Fund, allocated £1.25 billion to support up to 140,000 social homes to be retrofitted.
  • The Green Heat Network Fund, allocated £485 million to help up to 60,000 homes and buildings access affordable, low-carbon heating through new heat networks.
  • The Heat Network Efficiency Scheme, allocated £45 million to improve around 100 existing heat networks.
  • An additional allocation of £15 million to the Heat Pump Investment Accelerator programme.

Commenting on the announcement, Charlotte Lee, Chief Executive of the Heat Pump Association said:

 “The £1.545bn confirmed additional funding for the Boiler Upgrade Scheme for 2025-2028 is a very welcome boost for the heat pump sector. It shows a clear commitment to supporting the deployment of heat pumps and is equivalent to a 240% uplift in current annual funding. 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.”

Ian Rippin, MCS CEO, said:

“We are enormously pleased to see the Government pledge an additional £1.5 billion of funding to the Boiler Upgrade Scheme.

“The increase of the grant amount to £7,500 back in October made heat pumps affordable for more people. However, this came at the cost of reducing the number of overall vouchers the Government would be able to provide. Today’s announcement means that more homeowners across England and Wales can install low carbon heating with help from the Boiler Upgrade Scheme.

“The increase equates to an additional 200,000 vouchers, which will go a long way to supporting Government ambitions to install 600,000 heat pumps a year by 2028.

“With the Future Homes Standard consultation published last week showing clear signals from the Government that heat pumps are the only feasible choice for UK consumers to decarbonise their homes, and today’s doubling down on the Boiler Upgrade Scheme, there has never been a better time to invest in your low-carbon future by installing a heat pump.”

Nick Salini, Director of heat pump contractor Thermal Earth Ltd added:

“It’s great news to see the Government announcement of additional funding for the BUS. Increasing the available vouchers will help drive demand for heat pumps and the growth in the industry we all hope to see over the next few years.

“We have no doubt that heat pumps are the future for heating our homes and buildings, this extra financial commitment will encourage more homeowners and heating engineers to move away from the installation of fossil fuel-based heating systems.”

Daniel Särefjord, CEO, Aira UK, commented:

“The new £1.5bn funding for the Boiler Upgrade Scheme will drive investment and consumer confidence in the nation’s transition to cleaner, greener heat pumps. At Aira, we are certain that with government support, heat pumps will help to drive down energy bills for millions of families and reduce the UK’s reliance on importing expensive and polluting gas.

“We are investing £300 million in the UK’s clean technology sector and within the next decade, plan to employ 8,000 new Clean Energy Experts nationwide to help us decarbonise the residential heating market. It’s encouraging to see additional investment in the BUS, though there is still much to be done.

“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 EPCs 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.”