A UK Government's green heating scheme has been described as "seriously failing" by a Lords inquiry.
The Boiler Upgrade Scheme grants households £5,000 to help switch from a gas boiler to a low-carbon air source heat pumps, but the Lords Climate Change Committee said grant take-up is so low the national target for green heating is "very unlikely to be met".
And one heating expert went even further, calling the scheme “immoral” in light of the fuel poverty crisis and a “sick dog”.
Why such poor uptake of heat pump grants?
The Boiler Upgrade Scheme (BUS) is designed to help homeowners in England and Wales afford the upfront costs of installing a heat pump.
The £450m policy provides homeowners with grants of £5,000 to have air source heat pumps installed, and £6,000 for ground source heat pumps.
But the Lords Environment and Climate Change Committee said the scheme is failing to deliver on its objectives, following a “disappointingly low” take-up of grants.
In a letter sent to Lord Callanan, Parliamentary Under-Secretary of State for Energy Security and Net Zero, the committee warned that if the current take-up rate continues, only half of the allocated budget will be used to help households switch to low-carbon heating systems.
It adds that the UK Government’s 2028 target of 600,000 installations per year is very unlikely to be met because:
- Upfront costs are too high for many households, even with the help of the grant, making it impossible for low-income households to benefit from the scheme
- Public awareness of low-carbon heating systems is very limited, and promotion of the BUS has been inadequate
- There is a shortage of heat pump installers and insufficient independent advice for homeowners
- While heat pump running costs are becoming competitive with gas boilers in some modelling, progress is urgently needed through electricity market reform to ensure running costs are affordable.
The Committee advised policymakers to provide greater clarity to industry and consumers on feasible options for low-carbon home heating through a consistent policy framework, public communications, and householder advice.
It also recommends rolling over the remainder of the BUS first year budget into the second year and establish a review to consider extending the scheme beyond April 2025.
Baroness Parminter, Chair of the Environment and Climate Change Committee, said: “The transition to low-carbon heat is fundamental in the path to net zero, given that 17% of the UK’s greenhouse gas emissions come from our homes.
“The Government must quickly address the barriers we have identified to a successful take-up of the Boiler Upgrade Scheme in order to help grow the take up of low-carbon heating systems. It is vital they do so if we are going to meet our Net Zero ambitions.”
Is scheme appropriate in a cost of living crisis?
Mike Foster, the chief executive of energy trade body the Energy and Utilities Alliance (EUA) called the BUS a “sick dog that needs to be put down”.
He also expressed disappointment that any underspend on the scheme cannot be rolled forward to the following year, but will instead be “clawed back” by the Treasury.
He said: “This policy has always been flawed. Part subsidising an air source heat pump installation with a £5,000 bung leaves the remaining costs, average of an extra £8000, to be met by the consumer.
“Only the well-off need apply, which in the middle of a cost-of-living crisis with fuel poverty levels rocketing, is entirely the wrong priority.”
“With energy bills set to climb by another 20% in April, pumping money into the hands of those who wish to go green, rather than helping those who are forced to choose between heating and eating, is immoral.”
“And because the money is tied up in the scheme, it can’t be used to fund sensible measures like insulation that permanently reduce bills and carbon emissions. Insulation can also be targeted at the least well-off, making it a fairer policy too.”
“BUS is like a sick dog, it is best for everyone concerned if it is put down. And when they are ready to consider alternatives, we are more than happy to help devise a scheme that actually works and delivers lower bills and carbon emission reductions.”
