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New proposals unveiled to turbocharge heat pump rollout and slash installation costs

01 September 2023

The UK Government has revealed a series of proposals aimed at simplifying grant qualification, potentially saving businesses and consumers both time and money, while enhancing accessibility to low-carbon heating solutions.

Homeowners and small businesses could find it cheaper and easier to install heat pumps under new proposals set out on Thursday 31 August.

Proposed measures could mean varying the levels of grants that are made available, depending on the customer’s property type or existing fuel source.

This would make heat pump installations more affordable for even more households and small businesses, enabling them to benefit from low-cost and low-carbon heating.

Households could also save time and money through a simplified approach to qualifying for a heat pump grant by removing the need to install loft or cavity wall insulation first.

These changes will help more homes and businesses move away from costly foreign fossil fuels and onto cleaner, cheaper homegrown energy – forming part of the government’s drive to decarbonise the nation’s heating, with more than £81 million in vouchers already issued to customers under the Boiler Upgrade Scheme.

Today’s new proposals also provide an additional option to help consumers install new biomass boilers that also work as an oven, helping more households access the latest in cutting-edge, green technology.

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: “Heat pumps are a vital tool in cutting the carbon emissions from people heating their homes, while also helping to drive down costs and boosting our energy security.

“While a heat pump can be installed for a similar price to installing a gas boiler, the support we’ve put in place means it is an option for more and more households.

“Today’s changes go even further and will mean even more people could benefit from making the switch, offering them the option for a low-emission, low-cost form of heating their homes.”

A heat pump takes heat at a low temperature from the air or ground, increases it to a higher temperature, before transferring the heat into homes for heating and hot water. This technology is significantly more efficient than traditional boilers and uses cleaner electricity rather than fossil fuels – helping to reduce the carbon footprint of a home.

The government’s £450 million Boiler Upgrade Scheme was recently extended until 2028 and offers grants of £5,000 towards the installation of an air source heat pump; £6,000 off a ground source heat pump; and £5,000 off a biomass boiler. Consumers can also receive a zero VAT rate on installations.

Consumer satisfaction is also high, with 92 percent of surveyed heat pump owners saying they were highly satisfied with the technology after 2 winters, in an evaluation of the Domestic Renewable Heat Incentive Scheme, which was replaced by the Boiler Upgrade Scheme.

Heat pump installers, manufactures, suppliers, and the wider industry are now being invited to offer their views on the government’s proposed changes to the Boiler Upgrade Scheme, with the consultation open on GOV.UK until 12 October.

This comes alongside a government commitment to the Future Homes Standard coming into force in 2025. The Building Regulations will continue to set a performance-based standard rather than mandating or banning the use of any technologies.

However, to make sure that new homes are zero-carbon ready we plan to set the performance standard of the Future Homes Standard at a level which will effectively preclude new homes being built with fossil fuel heating.

Respond to the consultation by 12 October 2023: Proposed amendments to the Boiler Upgrade Scheme Regulations.

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