Government Boosts Heat Pump Funding: A Positive End to 2023
The government has announced a further £1.5 billion funding for the Boiler Upgrade Scheme and a new £400 million energy efficiency grant that will upgrade radiators and insulation from 2025; part of a £6 billion package designed to cut energy use and bills. Griff Thomas, Managing Director of GTEC and heatly, reacts to the news.
Critical Transition to Low-Carbon Heating: Griff's Perspective
We are at a critical point in the transition to clean, low-carbon heating; investment and innovation now will make a huge difference to the outcome in 2050, with every year that goes by a missed opportunity. That’s why I am so pleased the government has committed to boost funding for heat pump installations and much needed fabric improvements – a key part of heat pump performance that was previously chronically underfunded – it’s cracking news for heating engineers and a great way to end 2023.
Future Homes Standard and New Builds: The Shift to Heat Pumps
Just four days ago, the Future Homes Standard consultation was published, which makes it very clear: heat pumps will be the default heating technology for new builds from 2025. Gas boilers, hybrid heat pumps and so-called ‘hydrogen-ready’ boilers are not ‘zero carbon ready’ and are therefore off the table for new housing developments. Together with new funding for the Boiler Upgrade Scheme (BUS), this will drastically increase the amount of heat pumps installed over the next 5 years.
Importance of Installers in the Heat Pump Sector
It's great that businesses can invest in confidence, however, growth in the heat pump sector stems from installers. I cannot stress how important they are to heat pump deployment. Consumer demand is there, manufacturers are ready to deliver, but if there aren’t enough installers, nothing can happen.
Current Challenges in Heat Pump Installation
We can already see evidence of how the lack of heat pump installers is stalling progress. Octopus Energy, a company that has greatly improved consumer confidence, accessibility and demand through their innovative heat pump tariffs and installation scheme, has months-long waiting lists for an initial survey. They plan to recruit 2,000 engineers over the next year to meet demand for heat pumps, which has increased by 57% since the BUS grant was increased to £7,500 at the end of October.
Future Projections: Heat Pumps Installation Goals
Funding available for 2024/25 should deliver 20,000 new heat pumps, while the new investment will see 200,000 heat pumps installed across England and Wales between 2025 and 2028. Homeowners will also be able to access additional funding for upgrades to radiators and insulation that need to happen as part of their heat pump installation, further reducing the upfront costs.
Assuming a gradually increasing trajectory, we could see 100,000 funded heat pumps installed in the final year of the Boiler Upgrade Scheme. Together with new homes, which in 2023 totalled around 180,000, it is questionable whether the government will hit their 600,000 heat pumps by 2028 target.
The Road to 2050: Sustaining Momentum and Supporting the Supply Chain
It’s a welcome move, but we need to keep the pressure on, keep momentum up and support all areas of the supply chain with investment and innovation. Installers need to be supported at every step of their journey so ensure valuable knowledge and skills are retained in the workforce and we can squeeze every inch out of the remaining years to 2050.