Energy Secretary Ed Miliband has authorised Ofgem to over-allocate Boiler Upgrade Scheme vouchers by up to £50 million in this financial year, to a total of up to £200 million.
The move is geared to provide certainty that vouchers will continue to be available for the remainder of this round, ending in March 2025.
Data from the MCS has shown that heat pump uptake across the UK continues to rise, with over 40,000 installations so far in 2024, closing in on last year’s record-breaking total of 40,426. In August, there were 2,890 applications to the Boiler Upgrade Scheme, more than double the number in August 2023. Whilst slightly lower than July, August 2024 was the fourth-highest month for BUS applications since the scheme launched in May 2022.
The Heat Pump Association (HPA) says it has been closely monitoring the remaining budget of the scheme via Ofgem’s website and engaged with the team at DESNZ to flag concerns about the budget. The Association says it is “pleased to see that swift action has been taken by the government to prevent a hiatus in the market”.
Jess Ralston, head of energy at the Energy and Climate Intelligence Unit (ECIU), highlights the importance of maintaining support for heat pump policies to protect households from fluctuations in the international gas market:
“Heat pump demand is growing in the UK, boosting our energy independence as every electric heat pump installed reduces our reliance on gas, which will increasingly come from abroad as the North Sea continues its inevitable decline. The UK was so badly hit by the gas crisis partly because 85% of our homes use gas for heating, a mistake we can’t afford to repeat if there’s a future gas price spike.
“Ignoring any potential calls from the gas boiler industry to delay or scrap other heat pump policies like the Clean Heat Market Mechanism will be important for growing the market even further and ensuring that households are no longer exposed to volatility in international gas markets that the UK will never have control over.”
Meanwhile, CEO of Swedish heat pump manufacturer Aira UK, Daniel Särefjord, says: “The government’s decision to allocate £50M of additional funding to the Boiler Upgrade Scheme is fantastic news and shows that demand for clean energy-tech is exceeding expectations. We are seeing more and more British households warm to the potential of saving money on their energy bills this winter and beyond, thanks to the highly efficient technology available and related clean energy tariffs. I’m sure as consumers become more aware of the benefits heat pumps offer, and the government sweeps away the needless planning policy red tape and exorbitant levies on green electricity, we will see adoption rates accelerate at great speed.”
Hamid Salimi, national product manager – residential at Daikin, adds: “Daikin welcomes Ed Miliband’s decision to allow Ofgem to over-allocate BUS vouchers for heat pumps this financial year. This decision gives much needed certainty to the industry and will allow thousands of homeowners to install low carbon heating.”
