Ten thousand fewer households a year will be able to claim heat pump grants from the Government after Rishi Sunak’s overhaul of the scheme, it has emerged.
Just 20,000 households a year will be able to claim the Prime Minister’s more generous heat pump grants because the Government left a cap on the cost of the scheme unchanged.
Mr Sunak announced this week that he was increasing the grants to replace gas boilers with heat pumps from £5,000 to £7,500 per household.
However, it has since emerged that the £150m overall cap on the scheme has not been changed.
As a result, the number of households able to claim the grants each year will plummet from 30,000 a year to 20,000.
That compares with the Government’s declared target of persuading 600,000 households a year to switch to heat pumps by 2028 to ensure the UK reaches its net zero targets.
If the cap remains, just 3pc of the numbers targeted will be able to get the grants. The rest must pay the full costs for themselves.
Heat pump installations typically cost between £7,000 and £15,000, whereas replacing gas boilers costs £2,000 to £4,000. Increasing the budget of the grant scheme to fund 600,000 installations a year would cost £4.5bn annually.
Mr Sunak announced the increase in the size of individual heat pump grants as he overhauled the Government’s approach to net zero to stop families facing unnecessary costs.
As part of the changes, the Prime Minister watered down the plan to phase out gas boilers by 2035 and created an exemption for a fifth of households.
This change means they will potentially never switch to alternatives such as heat pumps.
He said: “We’ll never force anyone to rip out their existing boiler and replace it with a heat pump.”
Charlotte Lee, the chief executive of the Heat Pump Association, said the changes were “yet another blow for the heating industry’s confidence in Government policy”.
She said: “Manufacturers have invested in good faith in manufacturing facilities and training to support heat pump deployment in keeping with the Government’s election manifesto.”
Henrik Hansen, managing director of boiler manufacturer Vaillant, welcomed the increase in the grants for householders but added: “If the overall budget is not increased, the number of homeowners able to access the grant will be limited to 20,000 per annum, which represents less than 0.1pc of the housing stock in the UK, potentially slowing down the transition to heat pumps.”
The boiler upgrade scheme was introduced in May 2022 as a way of reducing the 68 million tonnes of CO2 emitted annually from home heating, which amounts to about 20pc of the UK’s emissions. It was expected to run until 2025 but has since been extended to 2028.
Responsibility for the scheme rests with the Department for Energy Security and Net Zero where Claire Coutinho recently replaced Grant Shapps as Energy Secretary.
A spokesman said the £150m cap was in place till the end of 2025 but could be reviewed, and added: “The Government has allocated £6bn for clean heat and energy efficiency spending over 2025 to 2028, from which funding for the extension to the Boiler Upgrade Scheme will be agreed in a future fiscal announcement.”