Limited Dissemination of £7,500 Heat Pump Subsidies Remains a Problem for Most Households
The UK Government's recent move to relax planning rules around heat pump installations has resulted in a 54% increase in grant applications during early 2025. However, to meet its goal of 600,000 heat pumps each year, the Government needs to ensure the Boiler Upgrade Scheme (BUS) remains accessible to homeowners.
Proposed changes aim to simplify and make the scheme more accessible. Key approaches include:
- Simplifying the application and approval process by minimizing paperwork and providing clear, user-friendly guidance to homeowners. This could involve a government advisor or digital platform that walks applicants through eligibility and installation steps directly, reducing confusion and administrative delays.
- Increasing upfront grants or subsidies to cover a larger portion of the initial cost of heat pump installation. For example, boosting the current £7,500 grants for air and ground source heat pumps, or introducing free or near-free upgrades for low-income households, similar to Scotland’s free boiler replacement schemes funded through Energy Company Obligation programs.
- Streamlining regulatory red tape by establishing simpler permitting and compliance requirements for installing heat pumps. Lessons can be drawn from energy infrastructure permitting reforms aimed at accelerating clean energy projects by shortening timelines and removing unnecessary legal hurdles.
- Providing one-stop government support hubs or digital tools where homeowners can check eligibility, connect with approved installers, and receive post-installation support, thus alleviating confusion caused by multiple agencies and fragmented information.
- Enhancing public awareness and clarity on the scheme’s benefits and procedures through consistent communication campaigns, ensuring households understand cost savings, carbon impact, and eligibility criteria.
These measures would address the primary obstacles of complexity, high initial costs, and bureaucratic inertia, thereby enabling more households to adopt low-carbon heat pumps under the Boiler Upgrade Scheme and accelerate the transition to cleaner heating in the UK.
In addition to these changes, the government has launched a consultation that could reshape how the Boiler Upgrade Scheme works. The confirmation of £1.545 billion in Boiler Upgrade Scheme funding through to 2028 was also announced. The changes also allow for leasing or subscription models, rather than requiring homeowners to pay full installation costs upfront.
Planning permission is no longer required for most heat pump installations near property boundaries, reducing delays due to planning permissions to 5-10%. Up to 40% of heat pump installation projects were held back by planning permissions before the recent rule changes. The Heat Pump Association called the announcement a "positive step".
However, experts warn that without deeper reform, the Boiler Upgrade Scheme risks falling short of its climate goals and locking out the people who need it most. The Heat Pump Association stressed that meaningful growth will only come if electricity pricing and financing models are rebalanced to make low-carbon heating genuinely competitive with gas.
Despite these changes, the Boiler Upgrade Scheme still presents barriers for many households in accessing low-carbon heat pumps. Proposed changes include expanding the list of supported technologies to include air-to-air heat pumps and thermal batteries. The success of these reforms will be crucial in meeting the UK's climate goals and promoting a cleaner, more sustainable future.
- To ensure the success of the Boiler Upgrade Scheme (BUS), the government is planning to guide homeowners through simplified application and approval processes, using advice from government advisors or digital platforms for eligibility and installation steps.
- As part of the proposed changes, the government aims to reduce initial costs by increasing upfront grants or subsidies for heat pump installations, with potential boosts to current £7,500 grants or free upgrades for low-income households.
- The government is streamlining regulatory red tape by establishing simpler permitting and compliance requirements for heat pump installations, drawing lessons from energy infrastructure permitting reforms.
- To alleviate confusion caused by multiple agencies and fragmented information, the government is considering providing one-stop government support hubs or digital tools for homeowners to check eligibility, connect with approve installers, and receive post-installation support.
- To increase public awareness and clarity on the scheme's benefits and procedures, the government plans to launch consistent communication campaigns, ensuring households understand cost savings, carbon impact, and eligibility criteria.
Experts caution that deeper reforms are required to make the Boiler Upgrade Scheme truly accessible and competitive with gas, with suggestions including expanding the list of supported technologies, rebalancing electricity pricing, and improving financing models.
The government's recent moves to relax planning rules have led to a surge in grant applications, but barriers for many households still exist. The success of these reforms will be critical in meeting the UK's climate goals and promoting a cleaner, more sustainable future. These changes aim to guide, design, build, and insulate a more energy-efficient home, fostering heating technology adoption and paving the way for a cleaner future.
