Government planning £5,000 grants per household to move to low-carbon heating systems

The government has launched its Heat and Buildings Strategy, which plans to drive down the cost of clean heat.

The document looks to ensure that low carbon, more efficient, heating systems such as heat pumps will be no more expensive – and in many cases may end up cheaper – to buy and run than gas boilers.

New grants of £5,000 will be available from April next year to encourage homeowners to install more efficient, low carbon heating systems – like heat pumps that do not emit carbon when used – through a new £450 million 3-year Boiler Upgrade Scheme. These grants mean people choosing to install a heat pump will pay a similar amount as if they were installing a traditional gas boiler.

  • Government sets out plan to drive down the cost of low carbon heating technologies like heat pumps, working with industry to ensure that in future they are no more expensive to buy and run for consumers as fossil fuel boilers
  • households to benefit from £5,000 government grants through £450 million Boiler Upgrade Scheme to help install low-carbon heating systems, part of more than £3.9 billion of new funding to decarbonise heat and buildings
  • £60 million innovation fund launched to make clean heat systems smaller and easier to install and cheaper to run
  • funding supports government’s confirmed ambition for all new heating systems installed in UK homes from 2035 to be low carbon

The £450 million Boiler Upgrade Scheme is part of more than £3.9 billion of new funding being announced by the government for decarbonising heat and buildings. This will fund the next 3 years of investment through the Social Housing Decarbonisation Fund, the Home Upgrade Grant scheme, the Boiler Upgrade Scheme and the Heat Networks Transformation Programme and reducing carbon emissions from public buildings through the Public Sector Decarbonisation Scheme.

The government and industry will also work together to help meet the aim of heat pumps costing the same to buy and run as fossil fuel boilers by 2030, with big cost reductions of between a quarter and a half by 2025 expected as the market expands and technology develops.

This will support the government’s new target for all new heating systems installed in UK homes by 2035 to be either using low-carbon technologies, such as electric heat pumps, or supporting new technologies like hydrogen-ready boilers, where we are confident we can supply clean, green fuel.

No-one will be forced to remove their existing fossil fuel boilers, with this transition of the next 14 years seeing the UK’s households gradually move away from fossil fuel boilers in an affordable, practical and fair way, enabling homeowners to easily make these green choices when the time comes to replace their old boiler.

Prime Minister Boris Johnson said:

“As we clean up the way we heat our homes over the next decade, we are backing our brilliant innovators to make clean technology like heat pumps as cheap to buy and run as gas boilers – supporting thousands of green jobs.

“Our new grants will help homeowners make the switch sooner, without costing them extra, so that going green is the better choice when their boiler needs an upgrade.”

Luke Osborne, ECA Energy Solutions Advisor, said:

“Today’s announcement is a step in the right direction. The grants will be more attractive than the outgoing Renewable Heat Incentive.

“However, £450 million over 3 years only equates to 90,000 installations. Industry is currently installing around 30,000 heat pumps per year, so this funding is unlikely to drive a large amount of additional demand – today’s announcement maintains the status quo for now.

“We need further commitment very soon if we are to make any considerable impact. The upcoming COP26 conference might be our best chance to do so.”

Neil Sawers, Grant UK’s Commercial Technical Manager, broadly welcomed the government’s announcement:

“Grant UK welcomes this step on the journey to Net Zero for the UK, however there are some barriers to overcome before we can truly begin to roll out some of the Government’s proposals.

“Positive steps towards resolving the current skills shortage are being taken with both the CIPHE Low Temperature Heating Course in addition to the Heat Pump Associations (HPA) LCL Heat Pump Training course, both of which will be available from Grant UK towards the end of this year. It is imperative that both the Governments funding initiatives and retraining/up-skilling of the workforce work in parallel.

“We are concerned that as yet there has been no announcement regarding other off gas heating alternatives, such as biofuels (HVO) and hybrid heating which would have a major impact on reducing carbon emissions and are more practical in terms of an immediate roll out.”

Rinnai Operations Director Chris Goggin also commented:

“Rinnai welcomes the UK “Heat and Buildings Strategy,” as it outlines a route to a green industrial revolution that enables the delivery of a lower carbon future and achievement of NetZero targets.

“In preparation for a national shift in domestic and commercial heating – the Energy Transition – Rinnai has updated specific models to accept multiple sources of fuel. Rinnai products can currently accept LPG, BioLPG and 30% hydrogen gas blends. On top of this, we will be offering, from the start of the New Year, a complete solution to include heat pumps, Hybrid systems and Hydrogen ready products – these technologies will launch our H3 initiative.

“Rinnai fully and totally supports all aspects of decarbonisation and are continuously adjusting our range of products accordingly. We continue to closely monitor the energy sector and inform all customers – end users, contractors, installer, heating engineers, consultants, designers, central and local authorities – of any developments that may affect choice and cost.”

However, from Mike Foster, CEO of the Energy and Utilities Alliance, described the strategy as “insufficient for the scale of the challenge we face”.

“The grant hardly sets the world alight and is insufficient to the scale of the challenge we face in terms of reaching Net Zero.

“It subsidises 30,000 heat pumps being installed each year and is well short of the support needed to get to 600,000 heat pumps installed each year by 2028. My suspicion is that the Chancellor is putting the brakes on the Prime Minister’s flight of green fantasy.

“I suspect hydrogen-ready boiler installations will be far greater than that number by 2028, suggesting that consumers have made their choice. But that choice, between heat pumps or hydrogen-ready boilers, is one they should have.”

Form not found, form id :279