More funds needed to boost heat pump incentive scheme

A report critical of the government’s Boiler Upgrade Scheme has triggered calls for unspent funds to be rolled over, investment in a consumer publicity campaign and more generous financial incentives for ground source heat pumps

The report from the House of Lords Environment and Climate Change Committee concludes that the Boiler Upgrade Scheme (BUS) is “seriously failing” to deliver on its objectives.

The £450m BUS scheme, which provides £5000 grants to UK households to upgrade gas boilers to heat pumps, has only used a third of its £150m annual budget so far, with just £49.7m issued in vouchers.

The report identifies a number of conditions that have led to the scheme’s poor performance. These include low public awareness of both the BUS scheme and the technology it funds, an undeveloped workforce, inaccessibility to low -income households, and inadequacies of the Energy Performance Certificate (EPC) rating system.

The committee has called for more practical benefits for households installing heat pumps, such as improved certificate ratings for energy efficiency, thereby making properties more desirable to buy at a later date, and a public information campaign about the benefits of heat pumps. High running costs are also putting people off in making the switch to heat pumps. Market reform, says the report, could go some way in narrowing the price gap between gas and electricity, and ensuring the cost of running a heat pump is affordable.

Price rebalance

A number of manufacturers have long called for energy reform, reducing carbon levies and making electricity more competitive with gas. Welcoming many of the conclusions from the review, Mark Wilkins, technologies and training director at Vaillant, comments:

“We urge government to rebalance energy prices by moving energy levies away from electricity to gas to make heat pumps a more attractive solution for low carbon heating, alongside working closely with local authorities to raise awareness of the properties that are already suitable for heat pumps and recognise those who make the

“For those properties that are unsuitable today, government should look to offer fabric upgrade grants so that homeowners and end users can immediately reduce the heat loss and energy usage in their property, while readying it for a heat pump in the future.”

Vaillant has also called for more market certainty and a clearer government strategy that will help to address common misconceptions about heat pumps.

Henk van den Berg from heat pump manufacturer Daikin UK agrees that more needs to be done to promote the benefits of heat pump technology to potential buyers: “It’s disappointing there hasn’t been more uptake in the Boiler Upgrade Scheme, but the government must do better at properly communicating the benefits of heat pumps versus fossil fuel systems.

“Clearer training support for installers – particularly sole operators – will be key to meeting this target, too. Daikin currently trains 3000 engineers to fit low carbon heat pumps every year, but we have the capacity to double this number. The government needs to support our industry in shouting about the opportunities that jobs in the green economy offer.”

Ground source

The Lords Committee’s report has also highlighted the fact that very few installations of ground source heat pumps are happening because the grant level is not high enough to match the higher relative cost. As ground source heat pumps can deliver greater energy efficiency, it is argued that they should also be incentivised appropriately.

Commenting on the findings, the Ground Source Heat Pump Association (GSHPA) argues that significant changes must be swiftly made to give the heat pump industry the opportunity to deliver on the original policy intent.

Laura Bishop, chair of the GSHPA, says: “We are pleased the enquiry has recognised the strategic benefits of ground source and networked heat pumps. We are calling for the underspend in this financial year to specifically increase support for ground source deployment to match the demand proven under the previous Domestic Renewable Heat Incentive.”

Dr Matthew Trewhella, CEO of The Kensa Group, adds: “We propose that grant levels should be related to carbon savings, as ground source heat pumps are the most energy efficient heating and cooling technology. They should also be reflective of the impact on the grid and the longevity of the infrastructure – both of which are more beneficial with ground source technology.”