The number of households receiving government grants for heat pumps worth up to £7,500 rises by 204% in a year
- The Boiler Upgrade Scheme has just completed its most successful quarter ever
Record numbers of households are receiving government grants for heat pumps worth up to £7,500, figures show.
The Boiler Upgrade Scheme (BUS) provides grants to install a heat pump in homes to encourage the introduction of ‘greener’ heating technology.
The latest figures show that a record number of 7,090 households received a BUS subsidy in the period August to October 2024.
That’s an increase of 35 percent from the previous three months, and an increase of 204 percent year-over-year
A total of £53.1 million in grants were provided in the period August-October 2024 – around a fifth of all BUS grants paid since the scheme launched in May 2022.
An Ofgem spokesperson said the boom in heat pump subsidies was partly due to the maximum grant raised of £5,000 in 2023, and the fact that the former government in May 2024 cut the red tape around minimum insulation requirements. requirements had been reduced.
Pump campaign: British people are enthusiastic about heat pumps, with installation subsidies proving popular
The cost of installing a heat pump varies greatly depending on your home, the heat pump you choose and whether your home requires any upgrade work.
The £7,500 BUS grant is unlikely to fund the full cost of purchasing a heat pump. British Gas, a major heat pump installer, said the starting price was £7,999 for an air-to-water heat pump, but most customers paid £13,190.
However, the demand for heat pumps still lags behind the total financing of the BUS.
The BUS paid out £88.8 million in 2023/24, against a budget of £150 million, while the BUS paid out £51 million in 2022/23.
The Government has earmarked £180 million for the BUS for the current year 2024/25, with £30 million added last month.
The most common type of heat pumps funded by the BUS are air source variants, figures from Ofgem show.
Air/water heat pump applications account for 36,165, or 96.7 percent, of all BUS subsidies to date.
Geothermal heat pumps received 2.6 percent of the BUS financing, biomass boilers 0.7 percent and shared ground loop heat pumps 0.06 percent.
The southeast was the region that received the most BUS subsidies, followed by the southwest and the east.
Half of the BUS subsidies are used to replace gas boilers, while 19 percent modernize fuel oil systems.
More than a sixth of BUS subsidies (16.2 percent) were used to install heat pumps in a house that did not yet have a heating system, while 9.2 percent replaced electric heating.
| Ranking | Region | Total subsidies | Total % |
|---|---|---|---|
| 1. | Southeast | 7,433 | 19.9 |
| 2. | South West | 6,863 | 18.3 |
| 3. | East | 5,062 | 13.5 |
| 4. | East Midlands | 3,740 | 10 |
| 5. | Yorkshire and the Humber | 3,598 | 9.6 |
| 6. | North West | 2,940 | 7.9 |
| 7. | West Midlands | 2,857 | 7.6 |
| 8. | London | 1,950 | 5.2 |
| 9. | Wales | 1,930 | 5.2 |
| 10. | North-East | 1,044 | 2.8 |
| Source: Ofgem | |||
Labor will further promote the introduction of heat pumps as part of its Warm Homes Plan.
This is a government initiative to improve the properties of low-income homeowners and private renters in properties with an EPC rating from D to G to at least C.
Each eligible home can use the scheme to access £15,000 for energy performance improvements and an additional £15,000 for low-carbon heating such as heat pumps.
Homeowners and renters don’t have to pay out of pocket to upgrade their homes in this way.
However, landlords will be paid for the upgrades of one home under the scheme, and will then contribute to paying 50 percent of the cost of improving each additional home.
Chancellor Rachel Reeves said in her autumn budget that £3.4 billion would be spent on the Warm Homes Plan from 2025 to 2028. The plan aims to upgrade five million homes.