Government announces plans to drive down cost of clean heat for homes

Plans to incentivise people to install clean heat for homes have been announced by the government as part of its Heat and Buildings Strategy.

Government announces plans to drive down cost of clean heat for homes

Plans to incentivise people to install low-carbon heating systems have been announced by the government as part of its Heat and Buildings Strategy.

Grants of £5,000 will be available for households to upgrade old, outdated heating systems with new technology such as heat pumps. The grants, which will be available from April 2022 through a new £450 million three-year Boiler Upgrade Scheme, mean people choosing to install a heat pump will pay a similar amount as if they were installing a traditional gas boiler.

The scheme is being described as a simple, fair and cheap way for people to replace their old boilers over the coming decade. The aim is to significantly reduce the UK’s dependency on fossil fuels and exposure to global price spikes, whilst supporting up to 240,000 jobs across the UK by 2035.

With heat in buildings being one of the largest sources of UK carbon emissions, accounting for 21% of the total, there is an urgent need to deliver a mix of new, low-carbon heating solutions to meet the UK’s legally-binding target to end the UK’s contribution to climate change by 2050.

The government has, however, made it clear that no-one will be forced to remove their existing fossil fuel boilers. It says it wants to see UK households gradually move away from fossil fuel boilers in an affordable, practical and fair way, enabling homeowners to easily make these green choices when the time comes to replace their old boiler.

Announcing the plans, 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.”

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.

To ensure electric heat pumps will be no more expensive to run than gas boilers, ministers want to reduce the price of electricity over the next decade by shifting levies away from electricity to gas. A call for evidence is expected to be published with decisions made in 2022.

To help grow the electric heat pump market and expand British manufacturing, a new £60 million Heat Pump Ready innovation programme has also been 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.

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