96% of Boiler Upgrade Scheme grants were for ASHP installations

The latest update on applications through the BUS between May 2022 and December 2023 has been released, with heat pumps accounting for around 96% of applications.

  • Up until the end of December 2023, there were 31,378 BUS voucher applications received. 96% were for grants towards ASHP installations.
  • Up until the end of December 2023, a total of 27,041 vouchers were issued. There were 29% more vouchers issued in December 2023 compared to the same month in the previous year; 1,443 in December 2023 compared to 1,121 in December 2022.
  • There was an increase of 39% in the number of redemption applications received in December 2023 (1,424) compared to the same month in the previous year (December 2022; 1,023).
  • Of the total 19,064 installations with BUS grants paid up to the end of December 2023, the largest proportion (47%) replaced gas systems, followed by oil (21%) and then properties which did not previously have a heating system at all (18%).
  • The median cost of an ASHP and GSHP since the start of the scheme has been £13,212 and £24,510, respectively (including the grant value). The median cost of a shared ground loop GSHP was £21,765.

Spencer Clark, Head of Residential Business Unit – Daikin UK, gives his view:

It’s clear that UK homeowners favour air source heat pumps to decarbonise their home heating, with over 30,100 of the funding applications made through the Boiler Upgrade Scheme (BUS) between May 2022 and December 2023, marked for air source heat pumps. That’s more than 95% of all applications made through the BUS over this period, with the majority of the other 5% submitted for ground source heat pumps.

Heat pumps are now more affordable than ever, reducing the carbon emissions of home heating, driving down costs for these households and boosting our energy security as a nation. Over its 15-year lifespan*, switching from a fossil fuel boiler to an air source heat pump can save homeowners more than £3,000 when compared to a gas boiler, more than £6000 compared with oil and more than £9,000 compared to LPG.

The upweighting of the Boiler Upgrade Scheme funding to £7,500, as part of an extra £1.5bn investment in the scheme by the Government, has made renewable heating more accessible. However, continuing to exclude hybrid heat pump systems – the cheapest and fastest way to decarbonise home heating – and bi-valiant systems from the scheme is a missed opportunity.

Moving back the deadline for banning oil and LPG boilers until 2035 and the full cancellation of the landlord’s efficiency targets will have a severe impact in the mid-term. This is only going to make hitting the 2050 net zero target harder and, most likely, more expensive for households – especially as the government continues to ignore the electricity levy, still favouring fossil fuels from a tax perspective.

Energy tariffs are also outdated; the Government needs to decouple the price of electricity from volatile gas price changes. This would help to reduce energy rationing and increase the financial viability of heat pumps for homeowners.

At a time when we should be building up the availability and efficacy of low carbon heating, it’s clear that the Government has given up on its commitments, with a target of up to 600,000 heap pumps being installed a year by 2028 in peril. This will undermine confidence, foreign investments and will have a significant impact on the growth in green jobs.