The Boiler Upgrade Scheme: Making Heat Pumps More Accessible to Households

Phil Hurley – Chair of the Heat Pump Association – takes a look at how the Boiler Upgrade Scheme could increase the popularity of heat pumps, and benefit both installers and the public.

The Boiler Upgrade Scheme is something we have long been asking for – a scheme that provides households with upfront financial support towards the cost of a heat pump.

Financial support has of course been provided to households since 2014 through the domestic Renewable Heat Incentive (RHI), but there is a fundamental difference between the two schemes: RHI has issued back payments to households once the renewable technology has been installed, whilst BUS offers grants to support the capital cost upfront.

The key thing to note here is that whilst RHI has been successful in supporting the deployment of heat pumps, it has remained out of reach for households who don’t have the means to pay for the installation initially, meaning the idea of back payments over a 7-year period has only ever really been an attractive proposition to those in a certain financial position.

The Heat Pump Association (HPA) has long advocated for an upfront financial incentive, much like BUS, to tackle the cost barrier standing in the way of the Government’s plans to see installations reach 600,000 per year by 2028. The Green Homes Grant supported the costs of heat pumps and energy efficient improvements from September 2020, with heat pumps proving to be an extremely popular choice amongst applicants. While this scheme was short-lived, closing prematurely in March 2021, it did well to demonstrate consumer demand for the technology and leaves us with hope that BUS could be a roaring success – provided it is properly managed.

Despite its limitation highlighted above, the domestic RHI has also demonstrated that consumer demand is on the up in recent months, with the scheme receiving its highest number of applications in January 2022 since April 2015. Of the 2,293 new applications received that month, 85% were for Air Source Heat Pumps (ASHPs).

Whilst RHI officially closed on 31st March, we can only expect this demand to keep on rising throughout the duration of BUS, which will provide vouchers of £5,000 for ASHPs and £6,000 for Ground Source Heat Pumps. It is worth noting that while we are pleased that the ASHP vouchers are higher than the £4,000 grants initially proposed – in line with our recommendations to government – we do however remain concerned about the vouchers provided for GSHPs. With applications for ASHPs consistently being higher than those for GSHPs throughout the course of RHI, £6,000 may not be enough to boost uptake of this technology considering the costs of the ground works required prior to installation.

As Chair of the HPA, I was invited to attend a Roundtable in March this year to find out more about how the scheme will work once it comes into play. Here’s a short summary of some of the key dates to be aware of over the coming months.

The Boiler Upgrade Scheme

  • The scheme is open to any installation commissioned and MCS certificate issued from 1st April
  • Installers can create an account on the BUS platform from 11th April – and are strongly encouraged to set up their accounts at this point
  • The BUS scheme will officially launch on 23rd May. From this date, they will be able to submit applications for installations commissioned from 1st April

Installer guidance will be published ahead of the scheme’s launch on the week commencing 2nd May, with a launch event focused on scheme application scheduled two weeks later.

The HPA is optimistic that the scheme will boost the uptake of heat pumps and build on the momentum we have already seen recently, with the Government clearly signalling its commitment to the role the technology will play in the decarbonisation of heat within its Heat and Buildings Strategy. However, we have a big concern around the timings of the scheme and the gap between RHI and BUS.

We have estimated that there would have been around 1,700 installations under the RHI between 31st March and 23rd May – when BUS officially begins. However, it is unfair for installers to be expected to shoulder the cash flow burden that the gap poses, and many may hesitate to undertake heat pump installations under the new scheme due to concerns that they could be declined once the voucher application can eventually be submitted some six weeks later. We can only hope that the initial hesitation from installers will be temporary and that confidence builds throughout the scheme’s duration.

If you are an installer looking to play a part in the rollout of heat pumps and delivery of the Boiler Upgrade Scheme, we encourage you to reach out to us with any questions. We would be more than happy to support you with information on training and MCS accreditation.

Visit www.heatpumps.org.uk for more information or email media@heatpumps.org.uk