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Incentive Scheme. Currently (as of February 2024) the scheme offers £7,500 for the installation of air source and ground source heat pumps. After receiving a significant boost in funding from the Government in October 2023, new figures released now show that the number of people applying through the BUS in December 2023 jumped by 49% compared to the same month in 2022. These increased incentives are not only expected to make heat pumps a more attractive option for consumers but also stimulate growth in the sector. The enhanced BUS is anticipated to have an impact on the industry, with manufacturers and installers already working through a high demand of interest in installations. The industry is taking steps to scale up its manufacturing capabilities but needs policy certainty on the timescales for the introduction of the Future Homes Standard and the Clean Heat Market Mechanism before investing too heavily. Through associations such as the Heat Pump Association, the sector is working to improve the quality of training for heat pump installers and increase the number of qualified and competent heat pump installers. The increase is highlighted in the uptake of the Government’s Heat Training Grant, which offers a £500 grant against an installer’s training. Since July 2023, the grant has funded 1,443 courses relevant to heat pumps and heat networks.
Continued collaboration between the government, manufacturers, trade associations, installers and consumer bodies is key to ensuring the ongoing success of the BUS and the acceleration of heat pumps in the UK. Whilst the outlook for heat pumps is promising,
several challenges remain. The biggest challenge to heat pump deployment is the high electricity prices in Great Britain, relative to gas, which is distorting the domestic heating market. Great
“The Heat Pump Association has called on the Government to introduce a temporary Domestic Heat Pump Tariff Discount to counteract the distortion in the domestic heating market caused by levies on electricity bills, which acts contrary to their wider decarbonisation goals.”
HEAT PUMPS
Britain has one of the highest electricity-to-gas price ratios (3.97) in all of Europe, nearly double that of the European Heat Pump Association’s recommended ratio of 2. A significant contributor to high electricity prices is the disproportionate application in Great Britain of Environmental and Social Obligations – often referred to by the Government as “policy costs” and known commonly as “levies”. In response to this challenge, the HPA has called on the Government to introduce a temporary Domestic Heat Pump Tariff Discount to counteract the distortion in the domestic heating market caused by levies on electricity bills, which acts contrary to their wider decarbonisation goals. More details can be found in our recent paper ‘Accelerating Heat Pump Deployment: Interim Domestic Heat Pump Tariff.’ The government’s latest support for heat pumps is a clear indication of its commitment to a more sustainable future. The enhanced BUS represents a significant step forward in making low-carbon heating systems accessible to a broader segment of the population, as well as the proposals within the FHS consultation. As the UK moves towards its Net Zero targets, the adoption of heat pumps is set to play a pivotal role in reshaping the nation’s approach to home heating.
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