Changes to the Boiler Upgrade Scheme are to be considered under a new government consultation to make it easier for homeowners to access the grant.
The consultation will seek ways to increase the numbers of vouchers being claimed by homeowners. It will also look at how to make it easier for homeowners to install air source heat pumps using the grant to meet the government's target of 600,000 heat pumps installed a year by 2028.
Some of the proposed changes include removing EPC and insulation barriers to make more homes eligible, reducing costs by 25%, as well as variable vouchers for homes with different heating systems to receive larger grants.
What is the Boiler Upgrade Scheme?
In May 2022, the Government introduced the £450 million Boiler Upgrade Scheme to help people afford heat pumps.
This means the government provides vouchers to help you pay for the initial installation of a renewable heating system.
If you switch from fossil fuel heating to a more eco-friendly option, like ground source heat pumps or, in some cases, biomass boilers, you can get grants of up to £6,000. For air source heat pumps, the grant can be as much as £5,000.
What will the consultation look at?
The consultation is proposing changes to numerous areas of the scheme, which include looking at:
- Increasing the grant amount for different homes
- Revising EPC rating requirements
- Allowing homes with poor loft or cavity wall insulation to access the scheme too
- Allowing biomass boilers with a cooking function to be purchased with the grant
On the government's website it states: "In this consultation, we set out proposed amendments to the Boiler Upgrade Scheme and are seeking views on whether we should be able to differentiate grant levels in different circumstances, whether to retain or amend the existing Energy Performance Certificate (EPC) requirements, and whether biomass boilers with a cooking function should be eligible under the scheme."
Why are the government proposing changes?
The proposed consultation has been introduced in order to encourage the underwhelming ground and air source heat pump installation figures, which are significantly below government targets.
Ofgem revealed only 15% of the available boiler upgrade scheme vouchers have been redeemed so far this year, with 13,766 of the 90,000 Boiler Upgrade Scheme vouchers used.
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.
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 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 figures, and suggested unless changes were made the heat pump uptake would continue to suffer.
Aiming to reduce heat pump costs by 25% by 2025
The government has expressed its plan to introduce the Future Homes Standard, which will require new buildings to use low carbon heating starting in 2025.
They have also outlined a concept called the Clean Heat Market Mechanism (CHMM). This will require heating appliance manufacturers to achieve specific targets for the percentage of low-carbon heat pumps they sell compared to fossil fuel boilers, starting in 2024.
The aim is to encourage investment and innovation in the manufacturing and installation processes, and transform the appeal of heat pumps.
The government is also collaborating with the industry to lower the initial cost of heat pumps. They have set a goal to decrease costs by at least 25% by 2025, with the ultimate aim of making heat pumps equally affordable to purchase and operate as gas boilers by 2030 at the latest.
Removing EPC obstacles for homes
Further changes have been suggested to the requirements for EPC ratings in homes looking to use the Boiler Upgrade Scheme.
To make sure that the Boiler Upgrade Scheme only covers properties suitable for low carbon heat technologies, the current scheme makes it necessary for a property to have a valid EPC (Energy Performance Certificate) that's less than 10 years old and doesn't have any pending recommendations for loft or cavity wall insulation.
This requirement exists because fitting a heat pump in a well-insulated home reduces the property's heat demand and ensures the efficiency of the heat pump installation.
Out of the 8,146 vouchers requested under the scheme up to July 2023 where there were still outstanding EPC recommendations, 70% have been successfully processed and paid by Ofgem.
Additionally, the House of Lords Environment and Climate Change Committee said that the use of EPC ratings and the connected insulation conditions should be removed.
The committee also recommended that households should be provided with dependable guidance concerning the variations in operational costs based on different insulation levels.
To simplify the process for consumers it is proposed future applications for properties with unresolved recommendations for loft or cavity wall insulation will be allowed, as long as a newly issued EPC is provided during the voucher redemption stage.
This flexibility also aims to reduce inconvenience for homeowners who may want to have the installation and insulation done simultaneously.
Variable grants could be offered to lower income households
As mentioned the Boiler Upgrade Scheme offers grants of £5,000 and £6,000 for heat pumps and biomass boilers, but these grants could set to change based on your property and current heating source.
Future grants may be differentiated between various property types, existing fuel sources, and property owners to provide fairer costs for consumers.
For example, homes with oil boilers, which tend to be rural homes, it has been suggested larger grants should be provided to cover the extra costs involved in transitioning to heat pumps. This could mean oil boiler owners could be offered grants of over £6,000 to switch to heat pumps.
It is hoped this change will make it more likely for lower income households and homes where the cost effectiveness of heat pumps is currently seen as a deterrent will be swayed to take up the scheme to the more eco-friendly alternative.
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News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.