More than half of heat pump grant cash still unclaimed

HEAT pumps are still getting a cool reception from homeowners with £183m in potential grants remaining unclaimed as the scheme reaches its second anniversary, according to data from Ofgem the energy regulator.

The Boiler Upgrade Scheme set up two years ago has issued just £127m in grants – despite having £300m on offer to persuade householders to ditch gas boilers for low-carbon home heating.

An Ofgem spokesman said that 22,307 households had been given the grants in the 23 months to March. That compares with a target of about 55,000. The figure will rise only slightly when the latest figures are added this week.

It comes as a think tank claimed that households with insulation, heat pumps and electric cars were more “energy patriotic” because they rely far less on imported fuels.

Analysis from the Energy and Climate Intelligence Unit found homes using heat pumps, insulation and electric vehicles make more use of British energy and use less than half the imported fuel of a household reliant on gas and petrol.

The boiler upgrade scheme was introduced in May 2022 as a way of reducing the 68m tonnes of CO2 emitted annually from home heating, about 18pc of UK emissions.

Most of those emissions come from the 25m homes with gas-fired boilers and another 2m using oil-fired heating. The aim is to move all of them to low-carbon heating, such as air source or ground source heat pumps, which extract heat from the environment.

Responsibility for the scheme rests with the Department for Energy Security and Net Zero which initially offered householders grants of up to £5,000 to replace fossil fuel boilers with heat pumps. However, heat pump installations cost between £10,000 and £15,000, whereas replacing gas boilers costs £2,000 to £4,000. It meant that, even with the grants, heat pumps remained costly and uptake was low.

Just 18,900 heat pumps were installed between May 2022 and December 2023 under the scheme, less than half of the 50,000 installations that had been expected. By contrast 1.5m new gas-fired boilers were installed, mostly to replace worn-out models, even though homeowners could have chosen heat pumps instead.

Last September, Rishi Sunak announced that he was increasing the grants from £5,000 to £7,500 per household. Ministers said since then applications have soared by 75pc.

The Energy and Utilities Alliance, which represents the manufacturers and installers of boilers and heat pumps, has warned that the price of a heat pump was unlikely to fall significantly.