£5,000 Heat Pump Grants Revealed in New Boiler Upgrade Scheme

The new grant announced in the government's Heat and Buildings Strategy could help you replace your gas boiler with a cleaner alternative A new government scheme to encourage householders to switch to low-carbon heating systems will offer up to £5,000 towards the cost of an upgrade, from April 2022.

The Heat and Buildings Strategy, released today by the department for Business, Energy and Industrial Strategy (BEIS), aims to change the way we heat our homes, to help meet the UK’s net zero carbon emissions target by 2050.

For now, the government has stopped short of banning the installation of fossil-fuel boilers. Instead, it’s hoping that cleaner alternatives such as heat pumps will cost the same to buy and run as gas boilers by 2030, encouraging more consumers to make the switch.

However, the benefits for homeowners are not clear cut. Even with a grant, heat pumps can be costly and inconvenient to install and may be inefficient in UK homes, which are some of the oldest and worst insulated in Europe.

What is going to replace gas heating?

The new Boiler Upgrade Scheme will offer homeowners up to £5,000 to install a low-carbon heating system in place of existing gas or oil heating.

The scheme’s £450m funding is expected to help install 90,000 heat pumps over three years – far fewer than the target of 600,000 a year announced in the Prime Minister’s 10-point plan last November.

Heat pumps won’t be suitable for everyone as they must be installed outside, and they require space indoors for a hot-water cylinder. Furthermore, heat pumps work best in homes that are already energy efficient, so anyone living in a poorly insulated property may face bigger bills or colder rooms.

Heat pumps are not the only alternative to fossil fuel boilers, and different homes will need different types of heating. The new strategy aims to improve the efficiency of all homes to Energy Performance Certificate (EPC) band C by 2035, but it is envisaged that a mix of low-carbon technologies will be needed to achieve this

The government has previously pledged funding for green heat networks and extended hydrogen trials, but it will be many years before these are rolled out on a large scale. Many homes, particularly in rural areas, may never be able to connect to either.

More low-carbon heating options are being developed

Meanwhile, some companies are working on innovative low-carbon heating systems. The Heat Wayv microwave boiler heats water using similar technology to a microwave oven, while Tepeo’s Zero Emission Boiler works like a battery to store heat. Like heat pumps, they are both powered by electricity, which will be much lower-carbon in future as we increase generation from renewable sources like wind and solar.

To reduce the cost of running electric heating systems, ministers are expected to shift levies away from electricity to gas over the next decade.

By the time a ban on gas boilers is introduced, there may be a much wider range of options available, suitable for different property types and sizes.

Sue Davies, Which? Head of Consumer Protection Policy, said: ‘While consumers want to play their part in achieving climate change targets, Which? research has found that they are too often confronted by financial barriers – with more than half of recent survey respondents citing the high cost of eco-friendly home heating systems as a reason why they wouldn’t make the switch.

‘More action from government on financial support available to buy low carbon heat pumps is positive, but it is only one piece of a larger puzzle. It’s vital that the government’s net-zero policy includes provisions to help people navigate the complex and confusing heating market, through access to the right information as well as robust consumer protections.’

What you can do now to improve your heating

Don’t rip out your boiler if it’s efficient – there are no plans to make anyone replace their heating system yet. Gas boilers will be replaced by low-carbon alternatives as part of the natural replacement cycle, so wait until your boiler needs replacing.

No matter what heating system you have, a well-insulated home is easier and cheaper to keep at a comfortable temperature all year round. While it may not be the right time to replace your boiler just yet, there is something that everyone can do now: improve your home’s energy efficiency.