Is it time to introduce a grant for hybrid systems? Martyn Bridges from Worcester Bosch argues that a financial incentive for consumers will help to address the current underspend of the Boiler Upgrade Scheme and make a significant difference to the government’s ambitions to decarbonise the domestic heating sector.
With government spending constantly under review, attention is turning to the uptake of government incentives like the Boiler Upgrade Scheme (BUS). It appears the BUS budget for last year, some £295 million, wasn’t entirely claimed. There’s been an underspend of £20-25 million.
So, whilst the £7,500 grant towards heat pump installation is one of the most generous in Europe, it’s still unable to generate the level of consumer demand the government would like to see.
What would it take to turn the tide on BUS uptake? Let’s discuss the outlook for the 2026/27 financial year.
The money available
The BUS budget is set to rise to £400 million this financial year. It begs the question: if we can’t spend £295 million, what chance have we of spending £400m?
Currently, consumer interest in purchasing a heat pump doesn’t look likely to make up the shortfall. It’s an impasse: if a consumer’s boiler fails during the winter months, they’re reluctant to put up with the lack of heating or hot water for weeks – or months – on end while they wait for the necessary approvals to purchase a heat pump installation through the BUS.
Instead, they opt for a straightforward – and fast – boiler replacement.
This is the dilemma the government faces. The majority of consumers with a ‘no heat’ situation will install a standard gas or oil-fired boiler, whilst eco-thinking consumers might plan the installation ahead of time or be willing to live without heat and water for a period. There are plenty of consumers who just won’t consider a heat pump.
Low-carbon solution
To help solve the challenge, we continue to lobby the government to acknowledge hybrid systems and include them in future funding plans.
One of the huge benefits of a hybrid system is that it suits both parties: the boiler component helps restore hot water and heat within days, while the heat pump element is added afterwards.
Yet, the government seems reluctant to acknowledge the benefits of hybrid heating systems – much less extend funding to help consumers purchase them – even though a hybrid system can help decarbonise home heating up to 80%.
And while heat pump sales are still rising, bit by bit, it’s nowhere near the rate that the government’s funding mechanisms prepared for.
Grant support
It stands to reason that plenty of consumers would take up the BUS grant if the government extended eligibility to hybrids. That’s particularly true if they have solar panels on their roof, which millions have. These eco-minded consumers could transition so much of their gas usage to electricity for no extra cost.
Even if the government earmarked a smaller £2,500 grant to support hybrids, it could help fund hybrid systems for three properties with the same outlay as part-funding a single heat pump under the BUS.
The HEM problem
The government’s reluctance to support hybrids has also permeated into its draft of the Home Energy Model (HEM) proposal.
The HEM firmly positions hybrid systems within its Band D classification. This means hybrids will breach the rental sector’s mandate to move home energy efficiency to Band C from 2030. Any landlord operating a hybrid heating system will be unable to achieve that rating.
One clear issue is the definition of hybrids used by HEM authors. The model’s wording suggests the hybrid’s primary heating source is the boiler, which we know not to be the case. Research by Worcester Bosch and Salford University recently found that the heat pump element contributes up to 100% of the heat load in certain conditions.
Even when a property’s external temperature is set to -2°C, the heat pump can still provide more than 70% of the heat requirement. This makes the heat pump the primary heating source of a hybrid system, which needs due consideration, given the blanket categorisation into Band D.
The BUS route
Consumers in 2026 have the choice between a new boiler or a new heat pump. But in the depths of winter, the disruption and delay that accompanies a heat pump installation just won’t float.
Other countries already offer support for hybrids. In Italy, they represent 40% of the heat pump market, and homeowners can recover up to 65% of the installation costs through a tax rebate. But for now, the UK government is holding tight to its ambition to cut fossil fuels out of home heating completely – however unrealistic that might be.
Perhaps the year’s underspend will be a telling sign for the government, as the current grant scheme is still not motivating homeowners to make the change.
We will continue to provide evidence demonstrating how hybrid performance is greatly undervalued, and hopefully, we’ll make inroads towards government support soon.
