Only 15% of the available Boiler Upgrade Scheme vouchers have been redeemed, Ofgem reveals

an air source heat pump in a rural setting
Of the available 90,000 Boiler Upgrade Scheme vouchers only 13,766 have been redeemed, according to Ofgem's monthly statistics (Image credit: Vaillant)

Only 13,766 of the 90,000 Boiler Upgrade Scheme vouchers have been redeemed, according to Ofgem's monthly statistics.

The scheme, which seeks to encourage ground and air source heat pump installation through grants, has previously been criticised for its lack of promotion by the government.

The government has promised action to promote the scheme, but experts warn that unless fundamental issues are resolved then take-up will not improve.

What is the Boiler Upgrade Scheme?

The government introduced the Boiler Upgrade Scheme (BUS) to assist homeowners in England and Wales in covering the initial expense of installing heat pumps to boost the uptake of the carbon-friendly technology.

Under this policy, which has a budget of £450 million, eligible homeowners can receive grants of £5,000 for air source heat pump installations and £6,000 for ground source heat pumps. Homeowners must made up the difference in cost if their project goes over that amount.

Heat pumps play a crucial role in the UK government's commitment to achieving net zero emissions by 2050. The residential heating sector presently contributes to 14% of the carbon emissions in the UK. 

Over £119m budget left for this years BUS vouchers

The BUS‘s monthly statistics show only 16,156 vouchers out of the 90,000 available have been issued between May 2022 and June 2023, according to Ofgem's monthly statistics.

However, the number of vouchers redeemed is even lower at 13,766. The BUS has a remaining budget of £119,901,000 for the second year of the scheme.

These figures will be concerning to the government as they have already extended the BUS until 2028 as part of their Powering Up Britain announcement after the House of Lords environment and climate change committee released a report in February revealing the UK's "disappointingly low" uptake of low-carbon heating systems.

Funding of the scheme was initially £450 million until 2025 before the extension, which did lead to concerns the scheme could run out of money three years early, but based on Ofgem's figures, the £450 million could struggle to be used by 2028.

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Ofgem figures published 9th August for BUS vouchers.
Voucher applications received21,438
Number of BUS vouchers issued16,156
Total value of BUS vouchers issued£81,283,000
Voucher redemption applications received14,081
Number of vouchers redeemed13,766
Total value of grants paid£69,210,000
Budget spent in Year 1 (23 May 2022 - 31 March 2023)£50,999,000
Remaining budget for Year 2 (1 April 2023 - 31 March 2024)£119,901,000
Remaining budget for Year 3 (1 April 2024 - 31 March 2025)£150,000,000

600,000 installations annually 'unlikely to be achieved'

The scheme aims to issue 30,000 grants annually in England and Wales, but recent government figures show that it only managed half that in its first year.

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 independent Climate Change Committee has stated that 15.3 installations per 1,000 households will be required to achieve the UK's net-zero target by 2050. However, at the current rate, it could take over 600 years to reach the Climate Change Committee's target of having 27.2 million homes with heat pumps by 2050.

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.

Why is the BUS running short?

The lack of installers and the expenses associated with adequately insulating homes for heat pump readiness have been identified by experts as the primary factors responsible. 

This information was revealed in the recently published data on grants allocated since the programme's launch in May 2022. These findings come on the heels of the UK government being deemed "significantly off track" by the country's climate watchdog.

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 numbers. 

The rollout of the BUS in its first year was also delayed with applications only being accepted from November 2022 rather than the official start date of May 2022.

Government promises to promote the scheme

The government has said uptake will soon improve and announced measures to improve understanding of the scheme.

In February, the House of Lord's Environment and climate change committee recently released a report revealing the UK's "disappointingly low" uptake of low-carbon heating systems due to factors such as the government's insufficient promotion of the Boiler Upgrade Scheme, limited public awareness, and inadequate independent advice.

Since then number has only dropped further with the government's own figures showing that the number of vouchers used has dropped since March. 

The government has announced its plans for broader promotion later this year. In order to meet the climate change targets set for the UK, the government aims to install 600,000 low-carbon heat pumps annually within the next five years. Presently, the installation rates are only approximately one-ninth of this target.

The government recently announced it is committing £5 million towards increasing the number of heat pump installers in the UK through a new Heat Training Grant, which will provide aspiring heat pump installers with £500 discounts on the costs of engineering courses.

A spokesperson for the Department of Energy Security and Net Zero, which is responsible for the scheme, said: "Industry has reported an increased level of enquiries and we are confident that deployment will increase as the year progresses."

Joseph Mullane
News Editor

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.