Boiler Upgrade Scheme Failing
The Lords Environment and Climate Change Committee spearheaded an enquiry into the Boiler Upgrade Scheme (BUS) from the government, which has been running for almost a year. Launched in April 2022, it is designed to transition households away from fossil fuels by offering a financial incentive to switch to low carbon heat pumps or a biomass boiler. The enquiry found, however, that the BUS has failed because of a staggeringly low uptake from the public.
The incentives come in the form of a discount to these systems. Automatically applied by the dealer on completion of the work, the BUS offers £6,000 off a ground source heat pump or £5,000 off an air source heat pump or biomass boiler. While this sounds like a lot to those outside of the business, considering heat pumps can average over £15,000, the final cost is still out of most household budgets.
Uptake of the BUS is meant to be in the region of 600,000 installations a year by 2028, but the committee found that 80% of the public are still unaware of air source heat pumps. The budget allocated to the BUS hasn’t gone very far either. As uptake of heat pumps has been so low, only half of what’s been set aside has been used. A general awareness of the BUS has not been advertised well enough to the general public.
On the flip side of this, there has been a shortage of installers. According to the committee, a lack of advice has been available for homeowners to make an informed decision about moving over to low carbon technology, and the discourse surrounding the role of hydrogen for home heating has led to confusion. The government’s persistence in looking at hydrogen as a replacement gas has hindered further uptake, especially when scientists have independently reported that it won’t work in the short or medium term.
While homeowners are capable of doing their own research, the biggest hurdle is the amount they have to pay in the first place. Low income households simply don’t have a spare £10,000 sitting around, especially in the wake of the crises the UK is currently facing. In highlighting the failures of the BUS, Baroness Parminter, chair of the committee, says that the government needs to address the barriers quickly in order to ensure sufficient uptake and make significant progress towards net zero targets.
Despite prices being high, Octopus Energy has recently released a heat pump that will match the price of a gas boiler, at around £2,500. This figure is achievable once the BUS discount has been applied, but it’s significant progress towards the biggest barrier to homeowners. By streamlining technologies and processes, Octopus Energy has managed to bring the price down to a much more affordable level. Considering that the Institute for Public Policy Research reported that the UK is only installing around 6% of the heat pumps needed to reach net zero, we could start to see a rapid increase of this figure now that companies are developing greener technologies themselves.
Further guidance and advice can be found on our heat pump page.