Boiler Upgrade Scheme is failing, says Lords committee

Launched in May 2022, the BUS aims to kickstart the decarbonisation of UK homes by providing grants to replace ageing gas-fired boilers with heat pumps or biomass boilers. But take-up of the scheme has been slow, according to the Lords committee, with public awareness and a lack of qualified installers highlighted as reasons for the disappointing results to date.

Energy deficiency: the challenge of decarbonising UK buildings

In a letter sent to Lord Callanan, Parliamentary Under Secretary of State for Energy Security and Net Zero, the committee warned that current take-up rates would see only half of the scheme’s allocated budget used up. Further down the line, the requisite market of installers and manufacturers will not be in place in time to implement low-carbon heating policy measures smoothly, with the government’s 2028 target of 600,000 installations per year ‘very unlikely to be met’.

According to the committee, the upfront costs of heat pump installation are too high for many households, even taking into consideration the £5,000/£6,000 grant available. In order to make running costs of heat pumps more cost-effective – and hence deliver a quicker return on investment – the Lords committee urged for electricity market reform.  

In addition, the committee also found that hydrogen is ‘not a serious option for home heating for the short to medium-term’ and claimed that misleading messages – including from the government itself – are adversely affecting adoption of established low-carbon heating technologies such as heat pumps.

“The transition to low-carbon heat is fundamental in the path to net zero, given that 17 per cent of the UK’s greenhouse gas emissions come from our homes,” said Baroness Parminter, chair of the Environment and Climate Change Committee.

“The government must quickly address the barriers we have identified to a successful take-up of the Boiler Upgrade Scheme in order to help grow the take-up of low-carbon heating systems. It is vital they do so if we are going to meet our Net Zero ambitions.”

The committee is also calling on the government to:

• provide greater clarity to industry and consumers on feasible options for low-carbon home heating through a consistent policy framework, public communications, and householder advice
• roll over the remainder of the BUS first-year budget into the second year and establish a review to consider extending the scheme
• correct the Energy Performance Certificates (EPC) methodology so that certificates properly reward households for making the switch to low-carbon heating and flawed EPC recommendations cease being a barrier to BUS eligibility
• upgrade the provision of government advice, alongside recognising the role of independent retrofit coordinators, to help households navigate low-carbon heating installations
• relax the requirement arising from Permitted Development Rights to site a heat pump a certain distance from neighbouring properties