Boiler Upgrade Scheme only hits half its first year targets

The latest government figures reveal that the Boiler Upgrade Scheme (BUS) is set to meet only half of its first-year target.

The scheme, which seeks to encourage ground and air source heat pump installation through grants, has only sent out half of the 30,000 grants its sets aside yearly for installations.

The government has promised action to promote the scheme, but experts warn that unless fundamental issues are resolved then take-up will not improve.

What is the Boiler Upgrade Scheme?

The government introduced the Boiler Upgrade Scheme (BUS) to assist homeowners in England and Wales in covering the initial expense of installing heat pumps to boost the uptake of the carbon-friendly technology.

Under this policy, which has a budget of £450 million, eligible homeowners can receive grants of £5,000 for air source heat pump installations and £6,000 for ground source heat pumps. Homeowners must made up the difference in cost if their project goes over that amount.

Heat pumps play a crucial role in the UK government's commitment to achieving net zero emissions by 2050. The residential heating sector presently contributes to 14% of the carbon emissions in the UK. 

600,000 installations annually 'unlikely to be achieved'

The scheme aims to issue 30,000 grants annually in England and Wales, but recent government figures show that it only managed half that in its first year.

The statistics indicate that only 16,052 vouchers have been issued and only 12,264 vouchers have been received from May 2022 to May 2023.

According to Ofgem, the UK government's goal of installing 600,000 heat pumps per year by 2028 seems unlikely to be achieved, as only a total of 42,779 heat pumps were installed in the UK last year.

The independent Climate Change Committee has stated that 15.3 installations per 1,000 households will be required to achieve the UK's net-zero target by 2050. However, at the current rate, it could take over 600 years to reach the Climate Change Committee's target of having 27.2 million homes with heat pumps by 2050.

This follows a report showing Britain is lagging behind in its uptake of heat pumps compared to the rest of the world and is the second worst European country for heat pump take-ups.

Why is the Boiler Upgrade Scheme running short?

The lack of installers and the expenses associated with adequately insulating homes for heat pump readiness have been identified by experts as the primary factors responsible. 

This information was revealed in the recently published data on grants allocated since the programme's launch in May 2022. 

These findings come on the heels of the UK government being deemed "significantly off track" by the country's climate watchdog. The Boiler Upgrade Scheme is set to run until 2028.

The UK's Climate Change Committee (UKCCC) has emphasised that the high costs of heat pumps, the shortage of trained installers, and the absence of energy-efficient measures such as insulation, which are crucial for heat pump effectiveness, are the primary reasons behind the low installation numbers. 

The rollout of the Boiler Upgrade Scheme in its first year was also delayed with applications only being accepted from November 2022 rather than the official start date of May 2022.

Leftover £70 million will go back to the Treasury

Rather than reinvesting the leftover money, the government has stated that the £70 million that remained unallocated between May 2022 and May 2023 cannot be used for future year's grants.

Instead, this money will be returned to the Treasury. The government has not commented on why this will not be reinvested given its push towards getting heat pumps installed in UK homes.

Government promises to promote the scheme 

The government have said uptake will soon improve and announced measures to improve understanding of the scheme.

A spokesperson for the Department of Energy Security and Net Zero, which is responsible for the scheme, said: "Industry has reported an increased level of enquiries and we are confident that deployment will increase as the year progresses."

In February, the House of Lords environment and climate change committee recently released a report revealing the UK's "disappointingly low" uptake of low-carbon heating systems due to factors such as the government's insufficient promotion of the Boiler Upgrade Scheme, limited public awareness, and inadequate independent advice.

Since then number have only dropped further with the government's own figures show that the number of vouchers used has dropped since March. 

The government has announced its plans for broader promotion later this year. In order to meet the climate change targets set for the UK, the government aims to install 600,000 low-carbon heat pumps annually within the next five years. Presently, the installation rates are only approximately one-ninth of this target.