Boiler Upgrade Scheme: Here’s What You Need to Know

The Eco Experts
cat on a radiator

You can get a £5,000 or £6,000 heat pump grant from April 2022

The average home will be able to save £2,827 over 20 years

But only 90,000 homes will benefit


Homeowners in England and Wales will be able to get £5,000 off the cost of a new air source heat pump from April 2022 – and £6,000 off the price of a ground source heat pump – thanks to the government’s new Boiler Upgrade Scheme.

However, because the scheme is receiving a relatively paltry £450m, a maximum of just 90,000 homes will be able to take advantage of the grant over the next three years.

That’s despite the Climate Change Committee (CCC) saying the UK needs to install 3.3 million heat pumps in existing homes by 2030 to reach net-zero.

heat pumps outside a home

How will the scheme work?

The Boiler Upgrade Scheme will operate on a “first-come, first-served basis,” with customers having to rush to register their interest with air or ground source heat pump installers.

Installers will then apply for the £5,000 or £6,000 grant on behalf of customers, and remove that amount from the heat pump’s price.

This makes the grant simpler for homeowners than the now-defunct Green Homes Grant, which required you to apply for energy-saving improvements yourself.

An Energy Department spokesperson told us “there will also be limited support available for biomass boilers in rural areas, where strict air quality and emissions criteria are met.”

Does this make heat pumps affordable?

Yes. For 90,000 lucky homes, the Boiler Upgrade Scheme will reduce the average cost of an air source heat pump from £10,000 to £5,000, making it cheaper than a new gas boiler.

It also means that moving from a gas boiler to a heat pump will save them an average of £2,827 over its 20-year lifetime, according to our calculations.

And this figure will increase if the price of gas stays high, and the price of electricity continues to fall.

Does the scheme go far enough?

No. 30,000 heat pumps per year doesn’t even exceed the current rate of installations, which was 37,000 in 2020.

Currently, fewer than 250,000 homes currently have heat pumps.

That means the UK is way off the 3.3 million mark that the CCC says the government needs to reach by 2030 to achieve its target of net-zero emissions by 2050.

The adoption rate must rise to one million installations per year by 2030 to reach 3.3 million, so it’s unclear how 90,000 discounted heat pumps over three years – at most – is sufficient.

Even the government’s own goal for heat pumps – of 600,000 per year by 2028 – seems like a distant dream if it won’t put serious money where its mouth is.

For the UK government, which spends around one trillion pounds per year, this £450m scheme is an insult to anyone who cares about the climate.

It’s not even a quarter of the funding set aside for the recent £2bn Green Homes Grant, which the government bungled by neglecting to promote or explain it to the public.

And it’s just 2.7% of the £16.5bn needed to put 3.3 million heat pumps in homes by the end of the decade.

Residential homes make up 16.4% of the UK’s emissions, and constitute the only major part of the nation’s carbon footprint that hasn’t fallen since 2011.

That seems unlikely to change any time soon.

The government's response to concerns

We asked the government whether it thought the scheme was sufficient to reach the CCC's 3.3 million heat pump target by 2030.

An Energy Department spokesperson told us: “The Boiler Upgrade Scheme is one of many policies supporting the development of the heat pump market towards 600,000 per year by [2028], with thousands of low-income homes already upgraded through schemes such as Home Upgrade Grant and Social Housing Decarbonisation Fund.

“It wouldn’t be right for the taxpayer to fund a new heat pump or clean heating system for every household, just as they do not for gas boilers now.”

We need to interrupt the quote here to point out that the scheme will not fully fund a clean heating system for anyone; it will only partly cut the initial cost, and it will only do so for a maximum of 90,000 homes.

The spokesperson added: “This scheme will kickstart the market and we are working with industry to bring down costs with the aim of ensuring they are as cheap to buy and run as fossil fuel boilers by 2030.”

Josh Jackman Senior Writer

Josh has written about eco-friendly home improvements and climate change for the past three years. His work has featured on the front page of the Financial Times; he’s been interviewed by BBC Radio; and he was the resident expert in BT’s smart home tech initiative.

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