In October, the government published its Heat and Buildings Strategy outlining the plan to cut emissions to net-zero by 2050. Part of this strategy includes a target for all new heating systems in residential properties to be low carbon by 2035 and introducing stricter EPC rules for commercial buildings and new-build properties. The end goal is to reduce the UK’s dependence on fossil fuels and avoid the reliance on fluctuating global gas prices, hopefully preventing another energy crisis such as the one we are currently experiencing.
The government is looking to incentivise the early adoption of heat pumps through a £450 million Boiler Upgrade Scheme (BUS) grant. Grants of up to £6000 will be available to apply for to homeowners looking to replace their gas and oil boilers with low-carbon heat pumps. The upgrade scheme will be able to help around 90,000 households switch to low-carbon heating, and currently, the grant would cover around half the cost of installing a heat pump
But what are heat pumps? Heat pumps can either be air sourced or ground sourced, with air pumps sourcing heat from the air, whilst ground pumps source heat naturally stored in the ground. Both then use this heat and transfer it to our homes. To be properly effective, homes will need to be well-insulated and draught-free, and there is little indication of help to improve insulation in the majority of residential homes included in the strategy.
The scheme launches today, 1st April 2022, and is open to homeowners in England and Wales. To be eligible your property must have a valid EPC, with no outstanding recommendations for loft or cavity wall insulation and will need to have enough power to support an installation capacity of 45kWth, which most homes will meet. Similarly, to the Green Homes Grant, applicants are advised to get at least 2 quotes from MSC certified installers, and once an installation has been instructed, the installer will apply for the grant on the applicant’s behalf. The value of the grant will then be deducted from the price the applicant pays.
The BUS, along with the recent announcement in the Spring Statement - that VAT has been cut from 5% to 0% on Energy-Saving Materials, until 31st March 2027, means that making your home greener is more cost-friendly than ever. However, these measures have still been met with criticism. Mainly, the cost. Homeowners will still need to produce thousands of pounds to give their home a green makeover that many homeowners will simply not be able to afford. The Government are hoping that the prices of heat pumps will be 25-50% lower by 2025 and are funding their ‘Heat Pump Ready’ innovation programme to realise this, which aims to make clean heat systems easier to install and cheaper to run.
Aside from money, for years homeowners have had little motivation, beyond a longing to be more eco-friendly, to insulate their properties. The memories of complex, troublesome and poorly managed energy efficiency subsidiary schemes of yore– the green homes grant for example – will make many homeowners reluctant to implement these green measures. UK homes are said to be some of the oldest and draughtiest in Western-Europe, making them some of the least energy-efficient, and these measures won’t go far enough to meet the UK’s energy efficiency goal of net-zero by 2050.
Looking at the private rented sector, it can be argued that there is little incentive for landlords to take expensive measures to insulate a property they will not be paying the energy bills for. However, with the speculated Minimum Energy Efficiency Standard’s, upcoming changes for all rented properties to meet an EPC band C, then the BUS and slashed VAT could come as a relief to many landlords who would not otherwise be able to afford the measures to get their property up to the required levels.
The future aim of the BUS strategy is to eventually use hydrogen for heating, using current heat pump technology. The Government have said they will be researching the use of these hydrogen heat pumps in a Village Pilot and assessing the effectiveness, due to be completed by 2026. In the meantime, companies such as Octopus Energy are investing heavily in heat pump systems, installations, and research. They’re aim is to be able to deliver heat pumps around the same price as a gas boiler in 2022 to the majority of UK homes.