Heat pump grant: government offers £5,000 to replace gas boiler - who can apply, and how much heat pump costs

The incentive forms part of a £3.9bn funding package aimed at decarbonising heating and buildings

Homeowners in England and Wales will be able to apply for £5,000 grants to replace their old boilers with more efficient, low-carbon heating systems, under new government plans to cut emissions.

The move aims to reduce the UK’s dependency on fossil fuels and will form part of the government’s £3.9bn Heat and Buildings Strategy.

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This action would not only help the UK lower its greenhouse gas emissions, but it would also leave the country less exposed to global price spikes.

UK households are facing such a spike this winter as energy firms have passed on higher wholesale costs to their customers.

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The Government hopes the move will insulate UK consumers from global energy price spikes (image: Shutterstock)

Who can apply for the gra

Homeowners can apply for funding from April 2022. £450m will be made available over the next three years - although this figure is only enough to cover 90,000 pumps.

The grants will be available for households in England and Wales.

How much does a heat pump cost?

The government believes the £5,000 grant would make the installation of a low-carbon heat pump a similar price to that of a traditional gas boiler.

Heat pumps currently cost around £10,000 on average to install

Why is government offering the grant?

Alongside the grants scheme, the government has also committed to working with industry to make heat pumps cost the same to buy and run as fossil fuel boilers by 2030.

The announcement has seen the government set itself a target to ensure all new heating systems installed in homes by 2035 either use low-carbon technologies or support new technologies, like hydrogen-ready boilers.

A further £60m will be made available in a bid to drive technological innovation in heating systems. The government hopes such innovation can make systems smaller, easier to install and cheaper to run.

What’s been said?

Speaking about the plans, 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 the 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.”

Business and Energy Secretary Kwasi Kwarteng said he expected environmentally friendly heating system costs to “plummet” over the next decade (image: Getty Images)

The government’s announcement was greeted positively by many of the UK’s key energy suppliers.

Keith Anderson, chief executive of ScottishPower, said: “Decarbonising heat is our toughest challenge on the road to Net Zero. With some 23 million UK homes to be converted to low carbon heating by 2050 we need to urgently support the delivery of proven zero carbon technologies, like heat pumps.

“Deploying heat pumps at scale will drive costs down dramatically over time, and will create wider economic benefits by promoting the UK supply chain and new skilled jobs.

“This is where the scale and ambition of the government’s Boiler Upgrade Scheme will be invaluable.”

While praising the government for providing “a golden opportunity” for the public and private sector to speed up decarbonisation, the Confederation of British Industry (CBI) urged Downing Street to provide clarity on its plans.

Greenpeace UK said the Government’s strategy also needed to include measures to improve insulation in homes (image: Shutterstock)

CBI chief policy director Matthew Fell added: “Government must now support this valuable work with a clear delivery plan for consumers, businesses and local authorities.

“The time is now to accelerate low carbon heat and energy efficiency solutions, grow the number of green jobs across the UK, and further support the government’s net zero ambitions.”

Meanwhile, environmental group Greenpeace said that while it believed the grant scheme and phasing out of traditional boilers was “a decent start”, it criticised the plans for not being “ambitious enough to adequately tackle emissions from homes or support low income households to switch”.

“What’s also missing from these reports is any mention of a programme to insulate the UK’s millions of draughty homes,” said Greenpeace UK’s head of climate, Kate Blagojevic.

“Low carbon heating must go hand in hand with improving energy efficiency - you can’t have one without the other.”

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