Is the Boiler Upgrade Scheme failing homeowners?

✔ The government has paid out 4,097 grants – 67% short of its target

✔ The rate of installations has slowed down since the scheme began

✔ Technical mishaps and a lack of publicity have hampered the initiative

The Boiler Upgrade Scheme is a positive step towards a greener future.

Over the first five months of this initiative, the government offered discounts of £5,000 or £6,000 on a new heat pump to households in England and Wales, making it cheaper to go green.

It only had enough funding to give grants to 90,000 households, but even this paltry number would represent a promising development.

Let’s see how the government fared over the grant’s five months, before the scheme’s level was raised to £7,500 in October 2023 – and therefore limited to 60,000 homes.

Is the Boiler Upgrade Scheme failing?

Yes, the Boiler Upgrade Scheme is failing homeowners and anyone who cares about fighting climate change.

When the three-year, £450 million scheme finally opened to applications in May 2022, the government’s aim was to hand out 30,000 grants per year.

If it was serious about reaching this target, then five months in, the government should’ve paid for 12,500 Boiler Upgrade Scheme grants. It’s handed out just 4,097.

That means the government has fulfilled just 33% of the heat pump installations it should’ve to stay on track to reach its overall aim.

How badly has the government failed so far?

It’d now be a miracle at this point if the government reaches 30,000 grants by May 2023, let alone its overall goal of 90,000 by the end of the scheme in 2025.

To reach this final target, the Boiler Upgrade Scheme would have to pay out 2,771 grants per month, on average, for the next 31 months.

That’s an increase of 338% on the current rate.

The government’s 30,000 annual target was already grossly insufficient.

After all, the independent Climate Change Committee has found we need to install 3.3 million domestic heat pumps by 2030 to reach net-zero.

And considering 29,471 Microgeneration Certification Scheme-certified heat pumps were installed in 2021, it was also a horribly unambitious target.

The fact that the government is so behind in reaching this mediocre goal is a slap in the face for green campaigners and homeowners who simply want to reduce their bills.

We asked the Department for Business, Energy and Industrial Strategy (BEIS) how it responded to accusations the scheme was failing, and what it would do to fix the problem.

A BEIS spokesperson told us: “The Boiler Upgrade Scheme has already paid out £26.7 million of vouchers to installers so far.

“This shows positive engagement from both industry and consumers with the scheme and we expect this to increase as it progresses.

“In January 2023, we will be launching a new marketing campaign for the Boiler Upgrade Scheme.”

Is the Boiler Upgrade Scheme succeeding anywhere?

No, the Boiler Upgrade Scheme is failing everywhere.

After five months, the government should’ve handed 12,500 grants to homeowners.

If each region had installed a sufficient amount of heat pumps to meet that target, based on their respective populations, there would be no orange in the chart below.

As you can see, there’s a lot of orange.

In London, the scheme barely exists.

Homeowners in the capital, which is home to nine million people, have received just 143 heat pump discounts – 7% of the 1,993 grants needed to meet the government’s target.

However, a Heat Pump Association representative explained to The Eco Experts that “London is largely on the gas grid, which means traditionally, running costs haven’t been as favourable with heat pumps – so it’s more cost effective to stay on gas.”

He added that so far, “about 50% of all installations have been on the gas grid.”

That means 50% of grants have been given to homes that aren’t connected to a gas provider, despite those properties making up just 14% of homes in Britain.

The scheme has also fallen well short in North East and North West England, where the government has only handed out 18% and 20% of the grants it should have.

In only one region – South West England – has the government even managed to hand out half of the required number of discounts.

Has it at least increased the number of heat pump installations?

There’s no evidence to show that more heat pumps have been purchased as a result of the Boiler Upgrade Scheme.

Instead, the number of heat pump installations has gone down since the scheme started, according to Microgeneration Certification Scheme data.

1,923 more heat pumps were installed in domestic properties in England and Wales over the same five-month period in 2021.

And in the five months before the initiative started, 5,430 more heat pumps were set up in homes.

Why is the Boiler Upgrade Scheme failing?

There are three main reasons why the scheme is falling short so far.

Let’s run through them, one at a time.

Lack of publicity

The government hasn’t publicised the scheme nearly enough.

We’re talking about a nationwide discount of £5,000 – 50% of the cost of an average air source heat pump – during an energy bill crisis.

This should have led to a huge surge in enthusiasm, but a general lack of awareness has hamstrung the initiative from the start.

A Heat Pump Association representative told us: “With schemes like this, you need a national media campaign letting people know what’s out there. That’s held up deployment a bit.

“I think the fact that it hasn’t been publicised has contributed to the low numbers.”

Fail to prepare, prepare to fail

Technical issues like the initial lack of an online portal for applications and low numbers of installers have plagued the scheme in its first few months.

A Heat Pump Association representative said: “A lot of the difficulties have been caused by the slow start to the scheme, and the fact that it wasn’t a smooth continuation from the Renewable Heat Incentive that was in place before.

“There were a lot of teething errors that led to installers having lower confidence, as well as delays in payments initially as well. That’s the biggest problem with the scheme so far.”

The cost of living crisis

The soaring cost of energy – and everything else – has led homeowners to focus on cutting their heating bills, but it’s also made it harder for them to afford large investments.

After all, a £5,000 discount on a heat pump is less attractive when it still costs £5,000.

A Heat Pump Association representative said that “people may not have as much money to spend as when the scheme was designed, meaning uptake hasn’t been as high as expected.”

Will Boiler Upgrade Scheme numbers rise?

The scheme could attract a higher number of people now that the government has raised the grant level to £7,500, but it hasn’t so far.

It has a lot of ground to make up if it’s going to hit its own targets.

A Heat Pump Association representative told us: “Numbers are ticking up, so it may just need more time. The trend is creeping up, and I’d expect that to continue, especially now that the heating season is really kicking in.

“Installers are starting to ramp up, and processing times have been reduced. Ofgem have also launched an online portal to process applications, and the feedback we’re receiving shows installers really like that.

“We want the scheme to stay in place. If it was pulled, it would really undermine confidence, and that’s not what we need in the heat pump market.”

Why does the Boiler Upgrade Scheme matter?

The government has pledged to reach net-zero emissions by 2050, even writing this goal into law in 2019, and has repeatedly used this example to bolster its green credentials.

That means net-zero is a legal obligation, as well as the only way we can lessen the worst effects of climate change – and yet, the government acts as if decarbonising the UK is optional.

Because of this ambivalent approach, the government has missed a host of climate targets, and its initiatives to equip UK homes with energy-saving technology have been half-hearted and poorly executed.

The £2 billion Green Homes Grant was meant to help 600,000 homes, but provided support to just 6.5% of that number, before being abruptly closed a year early.

The government created the Smart Export Guarantee – a programme that rightly forces large energy suppliers to pay small renewable energy generators for their excess power – but allows suppliers to offer any price, as long as it’s above zero.

This means companies can get away with paying households seven times less than the market price for their solar electricity, on average.

In 2022 alone, the government cancelled the plug-in grant and the Renewable Heat Incentive – schemes which both removed financial barriers to getting green technology.

The failure of the Boiler Upgrade Scheme up to this point isn’t an exception; it’s the norm.