Wealthiest take most state subsidies for installing heat pumps

Wealthy households are taking the lion’s share of heat pump subsidies as even with generous taxpayer grants the £13,000 equipment is out of reach for those on lower incomes.

Analysis of government figures found that wealthier regions, including second-home hotspots, were far more likely to take advantage of a £ 7,500 voucher towards the installation of the green technology.

The Energy and Utilities Alliance (EUA) trade body, which conducted the analysis, warned that the high up-front costs of installation risked worsening inequality as the Government races to meet its net zero targets.

Proponents of heat pumps, which run only on electricity, argue that switching from a gas boiler can save households hundreds a year in energy costs. But analysis of figures published by the Energy Department suggests that poorer households are less likely to install heat pumps, with experts warning they may be put off by the large upfront costs of purchase and installation which can run into the thousands.

The Government offers households up to £7,500 towards the cost of installing a heat pump as part of the Boiler Upgrade Scheme. The grant rarely covers the entire cost of installation. Households spend an average of £ 13,300 installing an air source heat pump.

In the North West, Blackpool has installed 2.8 heat pumps per 100,000 residents, compared; whereas Westmorland, in the same region, has installed 77.8. In London, Tower Hamlets installed 1.8 heat pumps per 100,000 residents compared with 26.2 for Richmond upon Thames.

Mike Foster, of the EUA, said: “The scheme is designed in a way that only the well- off can afford. The extra layer of unfairness is that this is a taxpayerfunded scheme and all taxpayers are contributing. Yet what is clear in the data is the size of the inequality. By definition only the well-off can receive the benefits – that is counter intuitive to how a progressive society runs.”

Octopus Energy, a supplier, estimates a typical household would save between £78 and £220 a year compared to gas, depending on the tariff.

The EUA found that South Hams in Devon has received more than 50 times the number of heat pump grants compared to Blackpool. South Hams has a total of 44.1 holiday homes for every 1,000 homes. Mr Foster said: “It would imply that there are more places in the South West that have subsidised heat pumps for holiday lets than in places like Blackpool.”

A Department for Energy Security and Net Zero spokesman said: “We’re committed to helping everyone, regardless of background, benefit from cleaner, cheaper heating.”

Tom Haynes