£5,000 government grants for heat pumps
The government will incentivise consumers to replace gas boilers in favour of heat pumps by offering £5,000 grants over the next three years.
Through the Heat and Buildings Strategy, the government has said it would encourage homeowners to install more efficient, low-carbon heating systems and that the grants meant people would pay a similar amount to install a heat pump as they would a traditional gas boiler, based on the assumption that the typical cost of installing an air source heat pump is £10,000.
The £450 million Boiler Upgrade Scheme is part of more than £3.9 billion of new funding being announced by the government for decarbonising heat and buildings. This will fund the next three years of investment through the Social Housing Decarbonisation Fund, the Home Upgrade Grant scheme, the Boiler Upgrade Scheme and the Heat Networks Transformation Programme and reducing carbon emissions from public buildings through the Public Sector Decarbonisation Scheme.
The government aims for heat pumps costing the same to buy and run as fossil fuel boilers by 2030, with big cost reductions of between a quarter and a half by 2025 expected as the market expands and technology develops.
This will aim to support their target for all new heating systems installed in UK homes by 2035 to be either using low-carbon technologies, such as electric heat pumps, or supporting new technologies like hydrogen-ready boilers.
To help grow the electric heat pump market and expand British manufacturing, a new £60 million Heat Pump Ready innovation programme is being announced, part of the £1 billion Net Zero Innovation Portfolio. The scheme will provide funding to drive technological innovation which will make the systems smaller, easier to install and cheaper to run over the coming years.
Prime Minister Boris Johnson said: "As we clean up the way we heat our homes over the next decade, we are backing our brilliant innovators to make clean technology like heat pumps as cheap to buy and run as gas boilers – supporting thousands of green jobs.
"Our new grants will help homeowners make the switch sooner, without costing them extra, so that going green is the better choice when their boiler needs an upgrade."
Business and Energy Secretary Kwasi Kwarteng said: "Recent volatile global gas prices have highlighted the need to double down on our efforts to reduce Britain's reliance on fossil fuels and move away from gas boilers over the coming decade to protect consumers in long term.
"As the technology improves and costs plummet over the next decade, we expect low carbon heating systems will become the obvious, affordable choice for consumers. Through our new grant scheme, we will ensure people are able to choose a more efficient alternative in the meantime."