Heat Pump Scheme

Many households are considering their options to reduce their energy costs in light of the recent price hikes in the cost of electricity and gas.

 

Aside from breaking into long sealed chimney breasts and burning the furniture, realistic options have been extended in recent weeks by the introduction of a government grant of £5,000 to replace fossil fuel boilers with efficient, low-carbon heat pumps.

Grants available in England and Wales

Homeowners across England and Wales can now benefit from the grants to fit clean heating systems when they come to replace their oil and gas boilers. This includes clean heating systems installed from 1 April this year.

Heat pumps are now much cheaper and more competitively priced against gas and oil boilers than ever before and thanks to these grants, it will be significantly cheaper for consumers to install a heat pump whilst improving the energy efficiency of their homes, reducing their energy bills and cutting emissions in the long-term.

Spin-off for British manufacturers

The scheme will also help kick-start the British heat pump manufacturing industry, helping government and industry to achieve the aim of bringing down the cost of the technology to ensure they are no more expensive to buy and run for consumers than fossil fuel boilers by 2030 when more households will be looking to make the switch.

With the market for electric heat pumps set to rapidly expand in Europe over the coming years, there is also a huge export opportunity for British firms in research and development, production, supply chain and installation over the next decade, creating well-paid jobs across the country.

How the scheme works

Scheme funding will be available through a simple application procedure that installers carry out on behalf of property owners, with the up-front funding taken off their quote.

The grants are in addition to the 5-year long 0% rate of VAT on the installation of heat pumps and biomass boilers, announced as part of a package of measures to help ease the cost of living.

The scheme has a committed budget of £450 million over 3 years from 2022-2025, with an annual budget allocation of £150 million and property owners will be able to get:

  • £5,000 off the cost and installation of an air source heat pump
  • £5,000 off the cost and installation of a biomass boiler
  • £6,000 off the cost and installation of a ground source heat pump

As well as not having to use expensive fossil fuels, heat pumps are also more efficient to run, able to deliver more than three units of heat for every unit of energy input, while traditional gas and oil boilers deliver less that one unit of heat per unit of energy.

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