The UK government has announced new measures to support the transition to clean heating in homes, including extra funding for heat pump grants and changes to the Clean Heat Market Mechanism.
The Department for Energy Security and Net Zero has unveiled an expansion of its Warm Homes Plan, aimed at providing energy-efficient upgrades to up to 300,000 homes in the coming year. This initiative is part of a broader strategy to help families save on energy bills while transitioning to cleaner heating solutions.
Key features of the Warm Homes Plan include financial support for homeowners in England and Wales, who can receive grants of up to £7,500 for heat pump installations through the Boiler Upgrade Scheme. The budget for this scheme will see a significant increase, with an additional £30 million allocated for this financial year and nearly doubling the budget to £295 million for the next.
In a move to simplify installations, the government will remove the one-meter rule that required planning permission for heat pump installations in England. Recent data indicated that 34% of potential heat pump customers were deterred by planning permission requirements. Additionally, low-income households, social housing residents, and renters will receive funded energy efficiency upgrades, including insulation and low-carbon heating solutions.
The investment is also aimed at bolstering British manufacturing in the clean energy sector, with plans to support the development of a homegrown heat pump industry. This includes a £5 million investment in Ideal Heating, marking the first award from the Heat Pump Investment Accelerator competition.
In addition, the government also plans to introduce a reformed Clean Heat Market Mechanism on April 1, 2025. According to a government press briefing, the changes to CHMM will be designed to ‘to make sure manufacturers have the time they need to scale up supply chains, making heat pumps an even more attractive choice for households and boosting sales without penalising those buying a new gas boiler.’
There will also be government support available for each and every heat pump installation that is required under the mechanism in 2025 to 2026.
The industry response to the government’s announcement on the Warm Homes Plan has been generally positive, with leaders from various sectors expressing optimism about the future of heat pump adoption in the UK. Executives emphasise the importance of increased funding for the Boiler Upgrade Scheme, the removal of planning barriers, and the introduction of the Clean Heat Market Mechanism as pivotal steps towards decarbonising home heating.
Charlotte Lee, CEO, Heat Pump Association:
“The package of measures announced by the government today demonstrates their commitment to accelerating the decarbonisation of heat in the UK.
“We welcome the clarity provided to the market on the long-anticipated Clean Heat Market Mechanism and the confirmation of additional funds for the BUS, both of which enable the sector to invest with confidence. The changes to the Permitted Development Rights will help to streamline the heat pump installation process for installers and consumers and support an accelerated deployment of heat pumps over the coming years.”
Ian Rippin, CEO at MCS (Microgeneration Certification Scheme):
“The confirmation of the Clean Heat Market Mechanism is a positive step for the sector and the changes to support the scaling up of the industry address concerns previously expressed. We look forward to continuing our work with the scheme to ensure that heat pump installations are to industry-recognised standards and are accurately recorded and reported. This is crucial in giving everyone confidence in the technology.
“Today’s announcement of changes to Permitted Development Rights are another welcome move that will support the deployment of heat pumps. We have worked to coordinate the industry’s responses and support with updates to tools and our standards, such as the MCS Planning Standard for Permitted Development Installations of Air Source Heat Pumps (MCS020), to facilitate these changes.”
Tamsin Lishman, CEO of Kensa:
“We strongly welcome today’s confirmation of the introduction of the Clean Heat Market Mechanism next April. This policy is critical to the expansion of the UK heat pump market, driving up installation numbers and giving the industry confidence to invest and scale up.
“Just like the Zero Emissions Mandate in the automotive sector, we expect the CHMM scheme will help drive down heat pump prices and increase installations. Reducing the initial level of penalties levied on boiler manufacturers strikes a sensible balance between getting the policy in place quickly and addressing concerns about possible market disruption. We urge the government to keep the scheme under scrutiny and make adjustments as necessary to ensure the scheme delivers on its intended objectives.”
Daniel Särefjord, Aira UK CEO:
“Today’s announcement will be a game-changer for heat pump adoption across the UK. It is a much needed and welcomed intervention from the government to ensure customers can save serious amounts of money on heating costs. This step highlights a strong commitment to tackling climate change while supporting the growth of the clean energy-tech sector and creating thousands of new jobs within the green skills workforce across the country.”
Jason Speedy, Ideal’s Heating chief operations officer:
“We’ve been manufacturing market-leading heating products in the UK for well over a century. Across the heating industry we’re now seeing a significant transition from gas boilers to sustainable solutions, such as heat pumps. That aligns closely with the UK’s net zero targets.
“This funding is a vote of confidence in our business and our position at the forefront of the industry’s move to low carbon heating solutions. It will enable us to accelerate our plans for heat pump production and complements the broader programme of investment across our operations as we lead the industry to a greener, low carbon future.”
Carl Arntzen, CEO of Worcester Bosch:
“We welcome the announcements from DESNZ on the removal of some of the siting barriers for heat pumps and the extra funding being made available for the Boiler Upgrade Scheme. We are hopeful these measures will enable more homeowners to view heat pumps as a realistic heating alternative.
“We’re also happy the minister has recognised the need to revise the CHMM and that further policy changes are required to increase heat pump demand and adoption in the UK.”
Henrik Hansen, MD at Vaillant Group UK:
“Today’s announcement represents a positive step forward addressing specific challenges felt by homeowners when considering the installation of a heat pump. By easing installation requirements, it addresses some of the barriers that have previously discouraged the adoption of this technology and shows what can be achieved by business and government working together.
“We welcome the boosted budget to the Boiler Upgrade Scheme allowing more homeowners to access funding when installing a heat pump. Additionally, we look forward to further announcements in support of the government’s Warm Homes Plan, to achieve the UK’s goal of reducing emissions and lowering the use of energy for households across the UK. “
Jan Rijnen, MD UK & Ireland, Baxi Heating:
“Today’s announcement of additional funding for the Boiler Upgrade Scheme is welcome, together with amending planning rules which will help simplify heat pump installations. We are committed to working with government to deploy practical and affordable solutions that help decarbonise homes, with the support of customers, industry, and manufacturers like Baxi. We will continue to work with government to further improve the Clean Heat Market Mechanism in the years ahead.”
