£450m government grants for 90,000 Heat Pumps

£450m government grants for 90,000 Heat Pumps

8:53 AM, 19th October 2021, About A year ago 45

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Landlords don’t hold your breath as the Government announces £3.9 billion for decarbonising heat and buildings. Of this only £450m is allocated for grants of £5,000 to replace old gas boilers with new heat pumps. This would equate to 90,000 installations over 3 years for England and Wales.

Currently, an air source heat pump costs between £6,000 and £18,000 so assuming a grant was available it is anticipated the average cost to an end-user after the grant would be £2,500.

There is also no detail yet on qualification criteria for these grants and if it will include landlords as well as homeowners, but it is likely that an insulation upgrade will also be required.

It is hoped the scheme will kick-start economies of scale improvements for the industry and start bringing down the cost of heat pumps.

The full government press release is below:

Low carbon more efficient heating systems such as heat pumps will be no more expensive – and in many cases may end up cheaper – to buy and run than gas boilers, under government plans being announced today (Monday 18 October).

Through the Heat and Buildings Strategy, the government has set out its plan to incentivise people to install low-carbon heating systems in a simple, fair and cheap way as they come to replace their old boilers over the coming decade. This will significantly reduce the UK’s dependency on fossil fuels and exposure to global price spikes, whilst supporting up to 240,000 jobs across the UK by 2035.

New grants of £5,000 will be available from April next year to encourage homeowners to install more efficient, low carbon heating systems – like heat pumps that do not emit carbon when used – through a new £450 million 3-year Boiler Upgrade Scheme. These grants mean people choosing to install a heat pump will pay a similar amount as if they were installing a traditional gas boiler.

The £450 million Boiler Upgrade Scheme is part of more than £3.9 billion of new funding being announced today by the government for decarbonising heat and buildings. This will fund the next 3 years of investment through the Social Housing Decarbonisation Fund, the Home Upgrade Grant scheme, the Boiler Upgrade Scheme and the Heat Networks Transformation Programme and reducing carbon emissions from public buildings through the Public Sector Decarbonisation Scheme.

The government and industry will also work together to help meet the aim of heat pumps costing the same to buy and run as fossil fuel boilers by 2030, with big cost reductions of between a quarter and a half by 2025 expected as the market expands and technology develops.

This will support the government’s new target for all new heating systems installed in UK homes by 2035 to be either using low-carbon technologies, such as electric heat pumps, or supporting new technologies like hydrogen-ready boilers, where we are confident we can supply clean, green fuel.

No-one will be forced to remove their existing fossil fuel boilers, with this transition of the next 14 years seeing the UK’s households gradually move away from fossil fuel boilers in an affordable, practical and fair way, enabling homeowners to easily make these green choices when the time comes to replace their old boiler.

Prime Minister Boris Johnson said: “As we clean up the way we heat our homes over the next decade, we are backing our brilliant innovators to make clean technology like heat pumps as cheap to buy and run as gas boilers – supporting thousands of green jobs.

“Our new grants will help homeowners make the switch sooner, without costing them extra, so that going green is the better choice when their boiler needs an upgrade.”

The Heat and Buildings Strategy sets out how we are taking ‘no-regrets’ action now, particularly on heat pumps, whilst supporting ongoing trials and other research and innovation on our future heating systems, including on hydrogen. We will make a decision on the potential role for hydrogen in heating buildings by 2026, by learning from our Hydrogen Village pilot. Heat pump technology will play a key role in all scenarios, so for those who want to install them now, we are supporting them to do so.

Business and Energy Secretary Kwasi Kwarteng said: “Recent volatile global gas prices have highlighted the need to double down on our efforts to reduce Britain’s reliance on fossil fuels and move away from gas boilers over the coming decade to protect consumers in long term.

“As the technology improves and costs plummet over the next decade, we expect low carbon heating systems will become the obvious, affordable choice for consumers. Through our new grant scheme, we will ensure people are able to choose a more efficient alternative in the meantime.”

Recent volatile gas prices across the world have demonstrated the need for the UK to build a secure, home-grown energy sector which supports households to reduce their reliance on fossils fuels such as using gas boilers, while protecting consumers and businesses from unforeseen price spikes.

Over the coming years, industry leaders expect electric heat pumps will cost the same as gas boilers to buy and run. UK manufacturers are already making electric heat pumps more attractive to consumers and more affordable and the government wants to incentivise consumers to make the switch as quickly as possible.

To ensure electric heat pumps will be no more expensive to run than gas boilers, ministers want to reduce the price of electricity over the next decade by shifting levies away from electricity to gas. A call for evidence is expected to be published with decisions made in 2022.

Greg Jackson, CEO and founder of Octopus Energy, said: “This Heat and Buildings Strategy will help kick-start a cheap clean heating revolution, by bringing prices down for households and allowing companies to invest in scaling up their clean heating operations. When the new scheme launches in April, Octopus Energy will install heat pumps for about the same cost as gas boilers.

“Octopus has already committed £10 million investment to its research and development and training centre dedicated to the decarbonisation of heat, and has begun training engineers at the rate of 1,000 per year.

“But this is just the beginning. By scaling up the technology and supply chain in Britain, innovative companies like ours will soon be able to fit and run heat pumps without any government support, bringing us one step closer to making the UK the Silicon Valley of Energy and creating thousands of clean energy jobs throughout the country.”

Electric heat pumps are more efficient, safer and cleaner than gas boilers and can help make homes more comfortable with less energy. Today we’ve crossed a massive milestone in our fight against climate change and to reduce Britain’s reliance on expensive, dirty gas.

To help grow the electric heat pump market and expand British manufacturing, a new £60 million Heat Pump Ready innovation programme is being announced, part of the £1 billion Net Zero Innovation Portfolio. The scheme will provide funding to drive technological innovation which will make the systems smaller, easier to install and cheaper to run over the coming years.

Kick-starting Britain’s new heat pump industry is expected to protect and create tens of thousands of new jobs in research and development, production, supply chain and installation over the next decade.

The Heat and Buildings Strategy builds on the Prime Minister’s 10 Point Plan, which outlined how decarbonising households and workplaces could support 240,000 jobs across the sector by 2035, with many thousands more into the future in areas such as manufacturing, developing and installing new low-carbon technologies.

With heat in buildings being one of the largest sources of UK carbon emissions, accounting for 21% of the total, there is an urgent need to deliver a mix of new, low-carbon heating solutions to meet our legally-binding target to end the UK’s contribution to climate change by 2050.

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8:50 AM, 20th October 2021, About A year ago

For a full long term objective, it needs a full long term plan. Throwing out PR bits here and there about heat/air pumps shows no consistent approach.
Unless there is a step back to look a the insulative concerns first, if lower emissions is the end game then proper house wrapping (proportionate to the type of property) has to come first.
No point spending time and money to retain water in a sieve if you don't line it first!

Peter Sproston

12:20 PM, 20th October 2021, About A year ago

For a normal sized house you don't need 3 phase supply. We didn't and our house is around 220 sq m. It has to be checked and use authorized by the local power distributor.

The HP circulation temp is adjusted according to how you want to heat your house. Clearly if a UFH system you don't need it blisteringly hot! Our water temp is about 40 C but of course it is not on all the time, only when the room stat calls for more heat. With UFH the floor becomes a heat sink and stores heat so there are no sudden differences in room temp. The downside is that it also responds very slowly which is why don't use a timer and leave the system on all the time.

40 deg C clearly won't be enough for normal radiators but I am told all HPs are able to cope with a variety of heat distribution requirements. Modern efficient radiators are of course preferable. The heat calcs may require a little oversizing for rads but not massively.

Of course as much insulation as can be installed will always help anyway and should be the first thing anyone does before spending huge amounts on a new system unless it has completely died.

david porter

12:28 PM, 20th October 2021, About A year ago

many houses are too big and need 3 phase
many cases will need to remove the floors so as to install underfloor
cheaper to demolish and start again?


12:43 PM, 20th October 2021, About A year ago

Reply to the comment left by david porter at 20/10/2021 - 12:28
It's certainly not environmentally friendly to start again. In my PPR I have solid concrete floors and parquet flooring and no cavity wall insulation. Putting cavity wall insulation in would cause a variety of problems and would be pointless because I've had the house scanned with a thermal imaging camera and that's not where it loses the heat. I have previously looked at eligibility for grants and been ineligible because I did not have CWI. So at the last replacement I went for a replacement gas condensing boiler.

david porter

12:55 PM, 20th October 2021, About A year ago

the prince o f wales has gone over to biomass
ie wood
because it is zero?

Peter Sproston

13:01 PM, 20th October 2021, About A year ago

I should add that the UFH HP water temperature is not related to the HW temp which you can select as required. The legionnaire cycle is runs automatically every week.

I have heard that air source HPs can be not as efficient in the far north of Scotland but again it would depend on exposure and having sufficient insulation.

Another issue raised by an earlier poster was water table being too high for a GSHP which puzzles me? We didn't have enough land for shallow trenches filled with slinky pipes so had 3 x 80m vertical wells and which of course extend well below the natural water table, and nearby sea level too. Of course the system has to be designed to suit your own environmental conditions and is much more sensitive that an ordinary condensing gas boiler installation. Pretty much anywhere within the UK the normal water table is at or near the surface anyway.

I have had CWI in all of my last three houses and have had no problems. Modern infill materials don't cause the same problems as earlier ones did. We currently live by the sea and get battered regularly with Atlantic storms, as indeed we are today!


13:09 PM, 20th October 2021, About A year ago

Reply to the comment left by david porter at 20/10/2021 - 12:55
Both of the properties I might be interested in could be converted to use biomass boilers. It's carbon neutral because it uses biomass as opposed to fossil fuels. If I could access the grant without installing CWI I would consider both a biomass boiler and a ground-source heat pump. CWI isn't suitable for all properties.

david porter

12:01 PM, 21st October 2021, About A year ago

there is a big conference coming up an BJ wants to show off his credentials
it must be likely that these plans will be modified

Paul Rimmington

10:59 AM, 23rd October 2021, About A year ago

A family member is currently down the ground source heat pump route. They were drilling for about 3 weeks the difficulty being with breakdowns and borehole collapses and also neighbour concerns about the noise and diesel fumes. The drills never got down to the desired depth and ended up with 3 bores instead of one to the desired depth. When finally installed and tested all the radiators didn’t heat up as they should and the engineer blamed the existing central heating system pipe work, at this point they had already removed the existing fairly new gas boiler. The cost was 28K just to install the ground source Heat pump but they should get a very small grant £500 to offset some of this cost, but I’m not sure it is tax payer's money very well spent. They had hoped to get a Green Home Grant for the insulation required to insulate the external walls, although applied and have waited many months for the builder, he has now said he can’t meet the deadline for work to be complete in time to get the grant. They now have to find the full £18,000 this is just to have the insulation attached to the internal wall and plaster finish. What it doesn’t include is the cost of moving a number of doorways to maintain insulation thickness on external walls, new wiring to allow for new wall thickness, new Kitchen and bathrooms some of which were serviceable and skirting boards etc. Also you need to consider the rooms are being made smaller with the depth of insulation and the plant required takes up a small room on its own. I would imagine the cost of replacement of all these items also has a significant impact on carbon emissions.

david porter

12:32 PM, 23rd October 2021, About A year ago

Reply to the comment left by Paul Rimmington at 23/10/2021 - 10:59
None of this in surprising unfortunatly

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