Energy bills: Households could claim £6,000 in heat pump scheme to combat price cap rise | Personal Finance | Finance

As of last month, the gas and electricity regulator Ofgem increased the energy price cap by 54 percent. This means that the average annual household energy bill in the UK will jump by £693 in the next year with further hikes to the price cap expected later this year. To address this growing concern, the Government has launched the Boiler Upgrade Scheme which would offer financial assistance to households looking to move away from fossil fuel reliance.

Costing £450million, the initiative will offer grants of £5,000 for air source pumps to be installed, with £6,000 being given to create ground source heat pumps in homes.

Some 90,000 households across the country are set to be eligible for this assistance which could see many move away from traditional energy dependency.

An estimated 14 percent of the UK’s carbon emissions reportedly originated from heating our homes, according to the Committee on Climate Change (CCC).

As well as reducing the pressures placed on household energy bills, the Boiler Upgrade Scheme is set to be an environmentally friendly solution to the cost of living crisis.

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Applications for the scheme open on May 23, 2022 for those who are interested in installing a heat pump into their home.

Those who live in England or Wales who own their property are eligible to apply for the grant support of up to £60,000.

However, their homes will need to have an installation capacity up to 45kWth, which is applicable to most households.

On top of this, they will need to have obtained a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation.


Despite the support offered by the scheme, many experts believe the installation costs of heat pumps into homes is more expensive than the Government is letting on.

Andy Kerr, the founder of boiler company BOXT, explained “Heat pumps are a good option for some homes looking to reduce their reliance on fossil fuels, however, they aren’t always suitable.

“For example, in older homes with poor insulation, the heat lost will require the pump to use more electricity to generate enough heat to maintain a comfortable temperature in the home.

“There are barriers to them being installed in flats or houses with no outside space due to the requirement of a supporting outdoor unit.

“In addition to needing the outdoor unit, heat pumps also require an internal water storage tank, which many properties no longer have due to the popularity of combi boilers, meaning a lot of homeowners have had their old tanks removed.”

Experts have warned that installation costs for heat pumps could rise as high enough as £35,000.

This far exceeds the support offered by the Boiler Upgrade Scheme and is more expensive than any traditional energy bill hikes.

Mr Kerr added: “It is a complex installation and usually requires for the whole of the central heating system to be replaced.

“The installation alone is very expensive and usually is around five times more expensive than a replacement gas boiler – and even with the new grants available via the Boiler Upgrade Scheme will have a significantly larger upfront cost than a gas boiler.

“In addition to the cost of installation, the way a heat pump works will take some adjusting to in terms of lifestyle. For example, it is best practice to keep the heating on at all times with a heat pump, and radiators won’t get as hot.

“Heat pumps operate most efficiently when the outside temperature is above seven degrees, and with rising electricity prices and the larger upfront cost compared to a traditional boiler, it may not be more cost-effective in the long run.”


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