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Government increases heat pump grant to £7,500 to cut pollution and lower utility bills

heat pump grant

Heat pumps generate significantly less pollution compared to gas boilers and can lead to reduced utility bills. Although they entail high initial costs, the government aims to align the expense of installing a new heat pump with that of a gas boiler through the scheme.

Homeowners are now eligible to apply for an augmented grant to facilitate heat pump installations, following a government revision of the scheme prompted by criticism regarding the sluggish adoption of this eco-friendly heating method.

According to the Department for Energy Security and Net Zero (DESNZ), this supplementary support has the potential to make the installation cost of a heat pump more economical than that of an average gas boiler for certain households.

The recent adjustment, introduced by Prime Minister Rishi Sunak as part of his “new approach to achieving net zero,” involves a 50% increase in the grant provided under the boiler upgrade scheme for air source heat pumps, elevating it from £5,000 to £7,500.

Simultaneously, grants for ground source heat pumps have been elevated from £6,000 to £7,500. Both variants are being promoted as effective measures to mitigate the UK’s impact on climate change and reduce household expenses.

Claire Coutinho, the Energy Security Secretary, emphasized, “No one should face the dilemma of choosing between cutting costs and cutting emissions.” She further noted, “This initiative will assist thousands of people across the country in reducing their energy consumption and maintaining warm homes.”

Nevertheless, the increase was disclosed concurrently with the Prime Minister diluting a prior commitment to phase out all new gas boilers by 2035. Instead, approximately 20% of households will now be exempt from this directive.

The analysis from the government’s climate watchdog, the Climate Change Committee, suggests that the recent adjustments may impede the attainment of the 2050 net zero climate target, as an increased prevalence of gas boilers emitting greenhouse gases for an extended period is anticipated.

The net-zero objective involves minimizing greenhouse gas emissions to the greatest extent possible and compensating for or capturing and storing the remainder.

Criticism of the government’s heat pumps and boilers policies was voiced last week by its infrastructure advisers, the National Infrastructure Commission (NIC). The NIC expressed dissatisfaction with the current rate of heat pump installations, stating that it fell short of expectations.

Addressing this concern, the NIC emphasized the necessity of increasing the scheme’s budget to extend benefits to more households. The existing scheme budget is reportedly underspent, providing room for additional grants, as reported by the PA news agency.

While the current estimates indicate that buying and installing a gas boiler costs between £2,500 and £3,000, the Department for Energy Security and Net Zero (DESNZ) highlighted that starting prices for heat pumps could now be lower for certain households, especially when leveraging the grant and additional discounts offered by energy suppliers.

A spokesperson from the National Infrastructure Commission (NIC) expressed appreciation for the increased subsidy but emphasized the need for more substantial assistance.

“We have urged the government to take more extensive measures, presenting costed proposals for a complete subsidy covering the cost of a heat pump and associated energy efficiency enhancements for approximately one-third of households with lower incomes. Additionally, we propose a grant of £7,000 along with zero per cent finance for others,” they stated.

Highlighting the necessity for significant initiatives to stimulate the heat pump market and transition away from gas, the NIC urged the government to implement impactful measures.

The advisory body also stressed the importance of reforming electricity bills to ensure that operating a heat pump is more cost-effective than using a gas boiler. Furthermore, it called for additional government funding to enhance energy efficiency in homes, facilitating optimal performance of heat pumps.

Greg Jackson, the Founder of Octopus Energy, noted the considerable demand for heat pumps due to their superior energy efficiency compared to gas boilers. He also highlighted the affordability of heat pump installations, especially with the government grants in place.


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