Heat pump grant rises to £7,500 in bid to cut pollution and bills

Homeowners can now apply for an increased grant to install a heat pump, as the government changes the scheme amid criticism that the rollout of the eco-friendly form of heating has been too slow.

The additional support could make the cost of installing a heat pump cheaper than that of the average gas boiler for some households, the Department for Energy Security and Net Zero (DESNZ) said.

The change, announced by Prime Minister Rishi Sunak last month as part of his “new approach to achieving net zero”, means the grant available under the boiler upgrade scheme for air source heat pumps will be increased by 50%, from £5,000 to £7,500.

Grants for ground source heat pumps have risen from £6,000 to £7,500. Both types are being promoted as a way to cut the UK’s contribution to climate change and lower household bills.

Energy Security Secretary Claire Coutinho said: ”No one should have to choose between cutting costs and cutting emissions.

She added: “This will help thousands of people across the country reduce their energy use and keep their homes warm.”

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However, the rise was announced at the same time the PM also watered down an earlier intention to phase out all new gas boilers by 2035, instead allowing around 20% of households to be exempt.

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This will make the 2050 net zero climate target harder to reach because there will be more gas boilers emitting more greenhouse gases for longer, according to analysis by the government’s climate watchdog, the Climate Change Committee.

Net zero means cutting greenhouse gas emissions as much as possible and offsetting or capturing and storing the rest.

Last week, the government’s policies on heat pumps and boilers were criticised by its infrastructure advisers, the National Infrastructure Commission (NIC).

The NIC said on Wednesday that the current rate of heat pump installation was “not cutting the mustard”.

It said the budget for the scheme needed to increase if more households are to benefit, otherwise the uplift in each grant would mean fewer households would be able to receive one.

The scheme’s current budget is underspent, meaning there is room for more grants to be made, the PA news agency has reported.

Buying and installing a gas boiler costs between £2,500 and £3,000 at the moment, according to estimates cited by the government.

“Starting prices for heat pumps can now be below this for some households, when taking advantage of the grant and additional discounts offered by energy suppliers,” DESNZ said.

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A NIC spokesperson welcomed the increased subsidy.

“But we have called on government to go much further, setting out costed proposals for a full subsidy for the cost of a heat pump and any related energy efficiency work for around one third of households on lower incomes, and a grant of £7,000 plus zero per cent finance for others,” they said.

“We need to see big, bold moves to kick start the heat pump market and to help get Britain off gas.”

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Founder of Octopus Energy, Greg Jackson, said: “We see enormous demand for heat pumps as they’re three or four times more energy efficient than gas boilers, and with these government grants they’re affordable to install too.”

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