Government’s new heat pump programme falls short of expectations

The Government’s much heralded ‘boiler upgrade scheme’ to boost installations of heat pumps is resulting in a disappointing uptake of the grants being offered. So far the daily rate of grant applications is a little less than half what could be expected if the Government’s annual uptake of approaching 30,000 heat pump installations was going to be achieved.

The scheme covers all domestic heat pumps installed since April 1st. By July 22nd only 3901 applications for grants were being processed according to figures derived from OFGEM (on July 22nd). The Government has set aside £450 million to cover the scheme over 3 years. This implies the installation of between 25,000 and 30,000 heat pumps a year. This is given the grant of £5000 for each installation of an air source heat pump (ASHP) and £6000 for an installation of a ground source heat pump (GSHP). At the current rate of installations only around 12600 heat pumps will be installed under the scheme in its first year.

In fact this level of incentives represent a cut in the level of incentives for heat pumps compared to those previously available under the ‘Renewable Heat Incentive’ (RHI). The new scheme has replaced the RHI. The RHI payments varied, but, using one example installed at the end of 2021, just over £7000 was payable for an ASHP installed in a 3 bed bungalow, albeit over 7 years. Rather more was available for ground source heat pumps (GSHPs) under the RHI.

The Ground Source Heat Pump Association (GSHPA) told ‘Current News‘ that ‘Despite the Government wanting to see a faster take-up of heat pumps installations, 62% of our members have seen a drop in customer enquiries for individual heat pump installations’. The GSHPA has called for increased incentives for heat pumps, including making heat pumps owners exempt from paying ‘green levies’ on their electricity bills.

Even this is very small beer compared to Italian incentives for heat pumps. This amounts to paying homeowners 110 per cent of the cost of the heat pump. This scheme lasts until the end of 2023 in its current form.

However, as reported by 100percentrenewableuk, by far the cheapest path to installing hundreds of thousands of heat pumps a year is to ban fossil fuel boilers in new homes. Such installations are much cheaper than retrofits for several reasons. Although this is nominally Government policy to be implemented in 2025, the lack of legislation to enforce this casts doubt on whether this will happen.

David Toke

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