UK Heat Pump Installations On The Rise

Estimated reading time 10 minutes

In a previous articles we looked at The Future of Heat Pumps In the UK . This project was funded by the UK Government Department for Business, Energy and Industrial Strategy (BEIS) and is part of the government’s Energy Innovation Programme which was setup to look at the feasibility of a large-scale rollout of heat pumps to UK homes. The project found that although “all housing types are suitable for heat pumps, from Victorian mid-terraces to pre-WWII semis and a 1960s block of flats – [and] the project has proven that heat pumps can be successfully installed in homes from every style and era”, a UK 2021 census: how homes are heated in your area found that the vast majority of homes, “around three in four households (74%) in England and Wales said [gas central heating] was their only central heating source. 9% of households were using electric-only heating. 3% of homes were using oil. Less than 1% of homes were using central heating powered completely by renewable energy.”

The lack of change over to heat pumps was found to be due to a lack of knowledge (or misinformation) with regards to heat pumps. A poll carried out by The Building Research Establishment (BRE) found that 62% of the public weren’t confident in explaining how heat pump technology works and only 42% of consumers had heard of the government’s Boiler Upgrade Scheme (BUS) which was designed to encourage people to change to heat pumps as their main form of heating.

The BRE poll was also backed up by the results from Shakespeare Martineau which found that around 66% of people “do not feel they confidently understand what a heat pump is, how it works and how they go about getting one.” Only 24% of people believed they had a good understanding of heat pumps. Worryingly only 12% of those surveyed said that if they needed to replace their boiler, they would replace it with a heat pump (6% air source and 6% ground source heat pump). 37% of consumers would replace their gas boiler with a new gas boiler which is higher than the 36% who responded with ‘don’t know’. Shakespeare Martineau also found that 60% of those surveyed were unaware of the government’s £5,000 heat pump installation grant.

It’s clear that a lack of familiarity and knowledge about heat pumps in 2021 was a barrier to uptake and less than 50% of consumers had heard of the government’s Boiler Upgrade Scheme (BUS).

Since the announcement of the boiler upgrade grant uplift by the government in September 2023 with an increase of grant level for air source heat pumps and ground source heat pumps from £5,000 (air source) and £6,000 (ground source) to £7,500 from October 2023 the UK government website states that there was a surge in heat pump applications after the government grant increase. They go onto say that the numbers of “new applications for the Boiler Upgrade scheme had reached 1150, more than 3 times higher than the average weekly rate since the government grant increased to £7500. Since then, new applications have remained nearly 60% higher than the previous weekly average.” 

Claire Coutinho, Secretary of State for Energy Security and Net Zero said “[The] new figures show our pragmatic approach to net zero is working. In the first week after our 50% increase to the Boiler Upgrade Scheme, applications tripled.”

The Minister for Energy Efficiency and Green Finance, Lord Callanan said “This fantastic increase in applications through the Boiler Upgrade Scheme demonstrates not only the desire for heat pumps in this country, but also that our approach to reach net zero works. We want more families to enjoy the more stable bills and cleaner heating that heat pumps have to offer – and today’s evidence that heat pumps make minimal noise is yet another reason to make the switch.”

Boiler Upgrade Scheme Statistics

The UK government Boiler Upgrade Scheme monthly statistics (Excel spreadsheet) show a number of key findings:

  • Since applications for grants opened for the scheme on 23 May 2022, there have been a total of 27,443 BUS voucher applications received up to the end of October 2023, the majority of which were for grants towards Air Source Heat Pump installations (96%). Month-on-month the number of applications in October 2023 increased by 173% from the previous month (from 1,231 applications in September 2023 to 3,355 in October 2023). This is likely a response to the grant increase which took effect from 23 October 2023, which saw a high number of applications in the final week of October.
  • 22,444 vouchers were issued. A total of 16,687 redemption applications were subsequently received, of which 16,096 have been approved and paid.
  • The highest number of applications to October 2023 has been in the South East and South West (5,318 and 5,292 voucher applications respectively). Similarly, the highest number of redemptions paid up to October 2023 has been in the South West and South East (3,168 and 3,036 redemptions paid respectively). These two regions collectively account for just under 40% of applications and redemptions.
  • For those vouchers that have been redeemed, the most common fuel type that the BUS installation replaced was gas (7,425 redemptions; around 46% of all redemptions). Nearly all BUS redemptions were for installations in domestic properties, with only 78 installations (72 ASHPs, 5 GSHPs and 1 biomass boiler) in non-domestic properties.
  • For those vouchers that have been redeemed, the median cost of a BUS installation of an ASHP was £13,140 with a median capacity of 10kW, whilst the equivalent figures for a GSHP were £24,847 and 12kW, respectively.
  • For those vouchers that have been paid, 9,341 were for properties in rural areas and 6,755 were for properties in urban areas (58% and 42% of all redemptions respectively).
  • For those vouchers that have been paid, 8,516 were for properties that were on the gas grid and 7,580 were for properties that were off gas grid (53% and 47% of all redemptions respectively).

Additional Support For The Boiler Upgrade Scheme

In a press release the UK government announced an extra £1.5 billion for the Boiler Upgrade Scheme, over and above the £6 billion already allocated in the Autumn 2022 budget after the success of £7,500 uplift to heat pump grants.

Energy Secretary Claire Coutinho said “Everyone deserves to live in a warm, energy efficient home. We have already made excellent progress with nearly 50% of properties in England now having an Energy Performance Certificate of C – up from just 14% in 2010. This funding will help us go even further and improve 200,000 cold, low income and social homes.”

Charlotte Lee, Chief Executive of the Heat Pump Association explains “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.

The popularity of the BUS since the grant uplift in October 2023, has demonstrated the public understands the benefits of moving away from fossil fuels to heat pumps and will commit to changing the way they heat their homes when it makes financial sense to do so. We call on the Government to urgently take meaningful steps to reduce the price of electricity, in line with their commitments, to further support the economic case for change and to enable meaningful, sustainable growth in heat pump installations.”

Chief Executive at Energy Saving Trust, Mike Thornton commentedImproving the energy efficiency of our homes and accelerating the electrification of heat are both vital for reducing our reliance on imported fossil fuels, achieving the UK’s net zero targets, and permanently lowering people’s energy bills.

We welcome these new schemes and additional funding, which will help provide much needed incentives to encourage more people to upgrade their homes. We look forward to learning more about the detail including plans for roll out and engagement, as well as how we can help the UK government to ensure they are as successful as possible in supporting people to get the right measures into their homes.”

Upgrading To An Air Source Heat Pump

In our June article we looked at whether an air source heat pump was the right choice for UK homes and discussed what an air source heat pump was, how it works, how efficient they are, the installation and running costs as well as the types of heat pumps available, their advantages and disadvantages and what to do next if you wished to have a heat pump installed.

Further to the article above the UK Government’s “Apply for the Boiler Upgrade Scheme” page outlines what you can get when looking to upgrade your boiler and explains grants are available for an air source heat pump, a ground source heat pump (including water source heat pumps and those on shared ground loops) and a biomass boiler. The grant does not cover hybrid heat pump systems e.g. a combination of gas boiler and air source heat pump. Your system must also meet certain standards, such as minimum efficiency levels. Your system’s maximum capacity must be less than 45kWth – anything over is not eligible.

You are eligible for a grant if:

  • you own the property you are applying for.
  • have installed or plan to install a new heating system on or after April 2022, and will be replacing a fossil fuel heating systems (such as oil, gas or electric).
  • you’ve already had funding to make your property more energy efficient, for example by insulating it.

Your property must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation.

Grants are not available for new builds (unless you move into a finished new build with a fossil fuel boiler, then you may be able to get a grant for a heat pump under the scheme), social housing or a property that’s already been given government funding or support for a heat pump or biomass boiler.

Self-build properties are eligible if you or the original owner built it yourself or you paid a builder to build it and it’s never been owned by a business or organisation.

To apply for a grant, the UK government advises contacting a suitable air source heat pump installer, confirming your eligibility with the installer and agreeing a quote. If your grant is agreed via Ofgem the value of the grant will be taken off the amount you have to pay for installation.

Synecore can advise on availability of the government’s Boiler Upgrade Scheme grant or VAT relief to help with cost of your heat pump install.

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