A House of Lords committee has given a damning assessment on the progress of the Boiler Upgrade Scheme launched by the Government in spring 2022, saying that it has “failed to deliver on its objectives,” following a “disappointingly low take-up of grants.”
The Lords Environment and Climate Change Committee the Committee wrote to Lord Callanan, Parliamentary under Secretary of State for Energy Security and Net Zero, warning “if the current take-up rate continues, only half of the allocated budget will be used to help households switch to low-carbon heating systems, and a healthy market of installers and manufacturers will not be in place in time to implement low-carbon heating policy measures smoothly.”
In the light of this, the committee added that the Government’s 2028 target of 600,000 installations per year “is very unlikely to be met,” and its chair Baroness Parminter added that the UK’s net zero target in 2050 would be endangered.
The Committee said that public awareness of low-carbon heating systems was “very limited,” with promotion of the scheme having been “inadequate.” In addition, there was a shortage of heat-pump installers and “insufficient independent advice for homeowners,” it said.
On the potential of hydrogen-based solutions, the Committee said it “is not a serious option for home heating for the short to medium-term,” and “misleading messages, including from the Government, are negatively affecting take-up of established low-carbon home heating technologies like heat pumps.”
However it also added that installing low carbon heating currently meant upfront costs are that were “too high for many households, even with the help of the grant, making it impossible for low-income households to benefit from the scheme.”
The Committee said that while heat pump running costs “are becoming competitive with gas boilers in some modelling, progress is urgently needed through electricity market reform to ensure running costs are affordable.”
Other recommendations included “greater clarity to industry and consumers on feasible options for low-carbon home heating through a consistent policy framework, public communications, and householder advice,” as well as rolling the remainder of the scheme’s first year budget into the second year. It said that Energy Performance Certificates (EPC) methodology should also be revised so certificates “properly reward households for making the switch to low-carbon heating, and flawed EPC recommendations cease being a barrier to BUS eligibility.”
Government advice should also be upgraded, the Committee said, including “recognising the role of independent retrofit coordinators, to help households navigate low-carbon heating installations.” Lastly, the Committee said that the requirement within Permitted Development Rights to site a heat pump a certain distance from neighbouring properties should be “relaxed.”
Chair of the Environment and Climate Change Committee, Baroness Parminter commented:
“The Government must quickly address the barriers we have identified to a successful take-up of the Boiler Upgrade Scheme in order to help grow the take up of low-carbon heating systems. It is vital they do so if we are going to meet our net zero ambitions.”
Before the Committee’s announcement, energy trade body the Energy and Utilities Alliance called for the Boiler Upgrade Scheme to be cancelled, describing it as a “sick dog that needs to be put down.”
EUA chief executive Mike Foster made the call following poor take up of heat pump grants in January, and following the announcing that underspend on the scheme would not be rolled forward to the following year.
Mike Foster said: “This policy has always been flawed. Part subsidising a heat pump installation with a £5000 bung leaves the remaining costs, on average £8000, to be met by the consumer. Only the well-off need apply, which in the middle of a cost-of-living crisis with fuel poverty levels rocketing, is entirely the wrong priority.”
“With energy bills set to climb by another 20 per cent in April, pumping money into the hands of those who wish to go green, rather than helping those who are forced to choose between heating and eating, is immoral.”
“The idea that subsidising 30,000 UK heat pumps would drive down the cost of a global product, with 2 million sold across the EU last year, is frankly for the birds. Subsidies like this tend to drive up costs; it is technology that slashes them.”
The scheme should be paying out 2,500 vouchers a month, in January it paid out just 920. Stressing the need to end the scheme, Foster said: When they are ready to consider alternatives, we are more than happy to help devise a scheme that actually works and delivers lower bills.”