£2,500 Heat Pump Scheme From Worcester Bosch

✔ Worcester Bosch wants to offer customers up to £2,500 towards a heat pump

✔ This can be added to the government’s £7,500 Boiler Upgrade Scheme

✔ The Worcester Bosch scheme is due to start in April 2024

Worcester Bosch has unveiled a new heat pump scheme that could give its customers up to £2,500 to put towards the cost of a heat pump.

When combined with the £7,500 from the government’s Boiler Upgrade Scheme, homeowners could get a total of £10,000 to put towards a heat pump, which just so happens to be the average cost of an air source heat pump for a three-bedroom house.

Under Worcester Bosch’s Clean Heat Cashback Pledge, homeowners and landlords replacing a boiler with a Bosch air source heat pump can get £2,500 cashback, or £1,000 for those installing a hybrid heat pump.

The scheme is due to run for one year only, from 1 April 2024 to 31 March 2025.

However, whether Worcester Bosch’s new scheme goes ahead or not depends on the government implementing its new Clean Heat Market Mechanism (CHMM) scheme, which imposes quotas for heat pumps installations on boiler and heat pump manufacturers.

CHMM is due to come into effect in April, but if the government u-turns on the policy, Worcester Bosch will not implement its Clean Heat Cashback Pledge.

white air source heat pump unit outside house

What is the Clean Heat Market Mechanism and how will it affect consumers?

The Clean Heat Market Mechanism (CHMM) is a government scheme that will impose quotas for heat pump sales on gas boiler and heat pump manufacturers.

It’s due to launch in April 2024, and in the first year of the scheme, manufacturers will have to match or substitute 4% of their boiler sales with heat pumps. The quota for heat pump sales will increase every year until it reaches 25%.

Manufacturers will have to pay a £3,000 fine for every heat pump they don’t sell.

The aim of the CHMM scheme is to make heat pumps cheaper and increase uptake so that the government can reach its goal of having 600,000 heat pump installations a year by 2028.

With the rate of heat pump installations only being around 35,000 a year in 2023, according to the latest MCS data, this has raised concerns among manufacturers that the CHMM quotas are unattainable. Many have stated that they’ll inevitably have to pass on the cost of the fines to customers purchasing gas and oil boilers.

Worcester Bosch, for example, though supportive of the government’s CHMM scheme, is planning to raise the price of its gas and oil boilers by £120 in the first year of the scheme.

The manufacturer created the Clean Heat Cashback Pledge in a bid to encourage customers to get a heat pump instead of a boiler, and make the price more accessible.

How much would a heat pump cost with the Worcester Bosch scheme?

The average homeowner could essentially get a heat pump for free if they qualify for both the Worcester Bosch scheme and the Boiler Upgrade Scheme.

An air source heat pump costs an average of £10,000 for a three-bedroom house. That goes down to £7,500 with the Worcester Bosch scheme, and £0 with the Boiler Upgrade Scheme.

Property size	Air source heat pump cost	Cost with the Worcester Bosch scheme	Cost with the Worcester Bosch scheme AND the Boiler Upgrade Scheme
One to two-bedroom	£7,000	£5,500	£0
Three-bedroom	£10,000	£7,500	£0
Four-bedroom	£13,000	£10,500	£3,000
Five-bedroom	£15,000	£12,500	£5,000

Using grants from both the Worcester Bosch scheme and the Boiler Upgrade Scheme will seriously cut the cost of installing a new heat pump, but it’s not clear if this will be enough of an incentive for consumers.

woman in yellow jumper warming her hands on radiator

Are the government’s targets for heat pump installations achievable?

Worcester Bosch has warned that the government’s new targets for heat pump installations, dictated by the CHMM scheme, are unachievable.

According to Worcester Bosch, heat pump installations are forecast to be around 40,000 units in 2024, but the CHMM is imposing a target of 60,000 installations.

This means that most boiler and heat pump manufacturers are likely to pay a fine for missing their heat pump sales target.

So what’s stopping consumers from switching from boilers to heat pumps? Well, as we’ve seen, cost is a major factor, something Worcester Bosch is trying to solve with its new scheme.

There are also a lot of negative myths about heat pumps floating around, that some believe are scaring consumers off.

The energy minister, Lord Callanan, for example, accused the boiler industry of spreading “campaigns of misinformation” regarding heat pumps on Sky’s The Climate Show.

A lot of these myths centre around heat pumps not being suitable for UK homes, or not being able to heat homes in the depths of winter. Neither of these facts are true, but not all homeowners are aware of this.

It also doesn’t help that around half of Brits haven’t even heard of a heat pump, according to our 2023 National Home Energy Survey.

More education on what heat pumps are, and how they work is probably well overdue if the government wants to reach its targets.

On a more positive note, a recent survey from Nesta found that over 80% of people who had a heat pump installed in Britain were satisfied with it, disproving the idea that heat pumps are bad alternatives to boilers.

Plus, heat pumps are getting more efficient all the time, with next generation high temperature heat pumps allowing homeowners to install one without all the associated retrofits.