The new scheme is designed to help homeowners replace their gas boilers with a more eco-friendly alternative

*This article was updated on 13 May 2022

The government has announced a new £5,000 grant for homeowners that will enable them to replace their gas boilers with heat pumps.

The three-year-long scheme, which will be open for application in England and Wales from 23 May 2022, is part of the government’s wider £3.9 billion plan to reduce heat-related carbon emissions, and is designed to encourage the adoption of greener heating technologies.

The grant – part of the £450 million Boiler Upgrade Scheme (BUS) – will bring the cost of heat pumps in line with regular gas boilers, which ministers have said will not be sold after 2035.

What are heat pumps?

Heat pumps are an environmentally-friendly way of heating homes and buildings. Instead of using gas or oil, they extract heat from air or the ground. They work even at low temperatures, and produce around three times as much energy as they use, making them a more efficient heating option.

Heat pumps are powered by electricity. As British electricity is increasingly powered by low carbon sources such as wind and hydropower, heat pumps are a cleaner alternative to burning gas – they also don’t emit the pollutants, such as nitrogen oxide, that boilers do.

How do heat pumps work?

In an air-source heat pump (ASHP), a refrigerant flows through a unit on the outside of the building where air is blown over the pipe, warming the fluid. Electricity is then used to compress the fluid, which raises the temperature further, enabling the system to carry the heat inside – sort of like a refrigerator in reverse.

In a ground-source heat pump (GSHP), the system works in a similar way except the heat is gathered via underground pipes. This is more efficient and therefore comes with lower running costs, although GSHPs are more expensive to install.

 
 
 

Are heat pumps as effective as gas boilers?

The main difference between heat pumps and gas boilers is speed. Gas boilers respond almost instantly, whereas heat pumps will warm a house more slowly and consistently via large radiators or underfloor heating. However, heat pump systems are designed to be ‘smart’, and can therefore determine the most efficient way of keeping your house at the temperature you want. You can also programme timing settings on a heat pump, just as you would with a gas boiler. The key difference is air or ground-source heat pumps are not producing carbon dioxide, the main gas responsible for global warming.

How will the heat pump grant work?

There will be no obligation for homeowners with gas boilers to make the switch to heat pumps. Instead the government hopes that homeowners will choose to make the change when the time comes to replace their existing gas boiler.

Under the BUS, homeowners can apply to receive grants of £5,000 for ASHPs and a slightly larger grant of £6,000 for GSHPs due to the more expensive excavation work required.

The grant is capped at 30,000 households per year for three years and will operate on a first-come first served basis. Fortunately, the application process is much simpler than the government’s Domestic Renewable Heat Incentive (closing on 31 March 2022), which requires customers to apply for the grants themselves.

In the case of the new scheme, your chosen heat pump installer will apply to energy regulator Ofgem on your behalf. Ofgem will then issue a voucher after reviewing the application, which will be valid for 3 months for ASHPs and 6 months for GSHPs.

Following the completion of the installation, the installer will ensure that the product is certified under the Microgeneration Certification Scheme (MCS) to indicate that the product meets eligible standards of performance. Ofgem will then pay the grant amount to the installer and the customer will be billed for the remaining sum.

The Heat Pump Federation is actively encouraging their installers to engage in the BUS scheme, so consumers can, and should, start looking for quotes in the lead up to the May application date; however, note that the installation must be MCS certified after 1 April 2022 to be eligible for the grant.

The confirmed timeline for the BUS scheme is as follows:

  • 1 April - Low carbon heating systems that are commissioned on or after this date will be entitled to support from this scheme. (Commissioning is the completion of the installation and set up of the system).
  • 11 April - Installers are able to open an account for the scheme with Ofgem, the scheme administrator.
  • 23 May - The scheme opens for grant applications and payments.

How much will it cost?

The cost of installing a heat pump varies significantly (~£8,000 to £35,000) depending on the type of pump, the size of the property, and the current quality of household insulation.

A key factor in all heating is having a well-insulated home to prevent heat from escaping. With rising energy prices, good insulation is a must. Here’s everything you need to know about keeping your home warm and cosy.

To qualify for the government grant, the household must have an installation capacity up to 45kWth (this covers most homes) and a minimum energy efficiency standard. All applicants must therefore have a valid Energy Performance Certificate (EPC) that has been issued in the last 10 years and no outstanding recommendations for loft or wall insulation. Households with minor insulation recommendations (according to their EPCs) can insulate their homes between applying for the scheme and heat pump installation, but this must be evidenced by an updated EPC at the voucher redemption stage.

The government claims the amount households will have to pay on top of the grant will be “similar” to the cost of a new boiler. It has also said it hopes to reduce the average cost of a heat pump by “between a quarter and a half” by 2025. However, even with the £5,000 grant, owners of larger and more energy-inefficient properties will face extra costs to install.

Choosing the right installer

As the heat pump industry is still maturing, choosing a good heat pump installer will require thorough research and consideration. An important first step is to look for registration and certification.

To qualify for the BUS grant, your chosen installer must be MCS certified, and heat pump trade bodies and manufacturers will have a list of certified installers on their websites. Choosing an MCS certified installer will ensure that you are covered by a Consumer Code, which guarantees a robust complaints procedure should you encounter subsequent faults or contractual problems.

You can use MCS’s handy postcode search on their website to find accredited installers nearby. However, installer selection should not depend on proximity alone, as good contractors are willing to cover a wide geographical area.

Instead, make sure to do your due diligence and ask the installers for references and relevant insurance documents. The Energy Saving Trust advises consumers to obtain at least three quotes, and it is important to follow the Heat Pump Federation’s detailed installer selection checklist to ensure that you have covered all bases.

Finally, there are a wealth of online resources available for any heat pump related advice and recommendations, including the Energy Saving Trust and the Simple Energy Advice Service. In particular, consumers can contact the various heat pump trade bodies for specialist guidance, such as the Heat Pump Federation, Ground Source Heat Pump Association (GSHPA) and Heat Pump Association. The Heat Pump Federation’s guide for residential consumers is a great place to start.

What do environmental organisations say about the heat pump grant?

While the grant is sure to bring heat pump technology into the public eye – and incentive its uptake for some – critics claim the scheme does not go far enough in addressing the UK’s emissions challenge.

At present, some 25 million homes in the UK are heated by gas boilers, and the government has previously expressed an ambition to have 600,000 heats pumps installed in the UK every year by 2028. However, as Friends of the Earth notes, the money allocated to the scheme would only support 30,000 pumps a year.

Speaking to BBC News, Friends of the Earth head of science Mike Childs said: “Investment will drive down the cost of heat pumps, and technical innovation plus skills training is a part of this, but so is scale. These grants will only incentivise the best-off households.”

The bottom line

Following the government’s surprising decision to scrap the Green Homes Grant earlier this year, we’ve been waiting for an announcement on some kind of similar scheme for insulation. Given the government’s net zero ambitions and emissions targets, tackling domestic emissions through greener heating technologies makes sense. But whether the new grant is extensive enough to drive renewable energy adoption in a meaningful way is up for debate. For those looking to replace their gas boiler anyway, however, the scheme could come at just the right time.

 

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