Heat pumps grant rises by 50% but UK Government warned it won’t meet 2050 net zero target

The UK Government has increased the grant available for households to install air source heat pumps by 50% but the move has been criticised for not going far enough. The plan - which see’s an extra £2,500 in support for households - took effect from Monday (October 23), the Government said.

The Department for Energy Security and Net Zero (DESNZ) said it will mean the cost of installing a heat pump could be below that of the average gas boiler for some households. 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 households installing air source heat pumps will be increased from £5,000 to £7,500.

And ground source heat pump grants have risen from £6,000 to £7,500.

However, the Government has faced criticism from the National Infrastructure Commission (NIC) on its policies relating to heat pumps and phasing out boilers. The NIC said on Wednesday that the current rate of heat pump installation is “not cutting the mustard”.

Around eight million buildings will need to switch from gas boilers, which currently heat around nine in 10 English properties, to cleaner alternatives by 2035 to meet the UK’s 2050 net zero target, the commission said. It also warned that the funding for the scheme needs to increase if more households are to benefit, with its chairman saying the uplift means fewer households now have access to grants, because the budget remains the same.

National World understands the scheme’s current budget is underspent and so there is room for more grants to be made. The Climate Change Committee has also raised concerns, saying the Government’s shift away from an earlier intention to phase out new gas boilers by 2035 and instead allow around 20% of households to be exempt will mean “residual emissions” bleed across the 2050 net zero target.

Estimates place the typical cost of buying and installing a gas boiler between £2,500 and £3,000, the Government said. The price of an air source heat pump can vary between £3,500 and £8,900 depending on factors such as brand, installation costs, and Government grants, according to energy company EDF.

The Government also said it making £10 million available through its heat pump ready programme to support innovation and cut installation costs, alongside launching a new campaign to help people improve energy efficiency in their homes this winter.

Energy Secretary Claire Coutinho said: “No one should have to choose between cutting costs and cutting emissions, our pragmatic approach means we can continue to deliver on our ambitious net zero targets without unfairly hitting the pockets of hardworking families.

“From today, for some households starting prices for heat pumps could now be below the average gas boiler, as we have increased the cash grant by 50% to £7,500 – making our scheme one of the most generous in Europe.

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

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.”

What are heat pumps?

The grants are designed to make the installation of heat pumps more affordable so that it made sense to install one when the current boiler needed replacing. The government’s announcement comes on the eve of COP26, in Glasgow, and against the backdrop of its intention to reach net zero carbon emissions by 2050.

To do that, they need people to change the way homes and buildings are heated. Heat pumps offer an alternative to traditional heating systems that use fossil fuels and have two types - air source and ground source.

Heat pumps are also seen as a low carbon source of heating and more sustainable in the long term.

How much do heat pumps cost?

The total cost of having a heat pump installed in your home is thought to range from £9,000 to £11,000 for an air source heat pump and up to £19,000 for a ground source heat pump. The estimations come from the Energy Saving Trust which say the up front cost is dependent on the amount of heat required for your home.

The organisation also warns households that fuel bills will still need to be paid because the heat pumps are powered by electricity. Due to green levies higher on electricity than on gas, heat pumps do not necessarily deliver savings on running costs despite being much more efficient than gas boilers.