UK Heat Pump Subsidies Face Cuts Ahead of Budget

The UK government is understood to be reducing the money available to subsidise heat pumps as it looks for ways to cut spending in Wednesday's budget, The Guardian reported.

Heat pumps are electric systems that warm a home by drawing heat from the outside air or the ground, and they are one of the main alternatives to gas boilers. The government's main support for them is the Boiler Upgrade Scheme, introduced in 2022 to help households and businesses cut the carbon produced by heating. It offers upfront grants worth up to £9,000 to help property owners replace fossil fuel and direct electric heating with low-carbon options such as heat pumps and biomass boilers. Only one grant is available per property.

The scheme has a £2.7 billion budget covering five years, according to an earlier Guardian report. In April, the government published an approval by the Secretary of State for an increase to the scheme's budget.

Heating buildings accounts for nearly a fifth of the UK's greenhouse gas emissions, according to the latest government data. Norway has 632 heat pumps for every 1,000 households, while the UK has 3.5, the Guardian reported.

Installers are concerned about the plans. Bill Tuck, operations director at Sustain Homes in Watford, said about 75% of the firm's customers pay for their heat pump using government subsidies. Jim Lacey, who has installed renewables for 20 years through his business JLN Plumbing & Heating, and Adam Killa, founder of Ask Renewables in Burscough, Lancashire, also spoke to the Guardian about the subsidy plans.

Killa's business offers a precedent. The Renewable Heat Incentive, a scheme that paid households for generating clean heat, closed in 2022. After it stopped, Ask Renewables went from carrying out six to eight installations a week to none.