£450m programme hit by low take-up and unlikely to drive market change for low-carbon heating, House of Lords committee warns
A £450m government scheme designed to drive the rollout of low-carbon heating options for homes is on track to achieve just half of its planned take-up rate, making a broader target of 600,000 installations a year by 2028 “unlikely to be met”, a House of Lords committee has warned.
Members of the Environment and Climate Change Committee said the Boiler Upgrade Scheme, which launched in May last year, is “failing to deliver on its objectives” following a “disappointingly low take-up of grants”.
The three-year programme offers grants of £6,000 for the installation of ground-source heat pumps, and £5,000 for air-source heat pumps, and biomass boilers and other low-carbon heating solutions as an alternative to traditional gas boilers. However peers found that that the scheme had been poorly promoted and that public-awareness of low-carbon heating systems is inadequate.
They added that even with grants, the cost of installing low-carbon heating options was too high for many households. Other major problems include a shortage of heat-pump installers and a lack of independent advice for householders.
Peers said that figures from regulator Ofgem showed that as of 31 January, a total of 9,889 vouchers had been issued with a total value of £49.7m. Ofgem said 7,641 vouchers had been redeemed – meaning there had been 7,641 installations.
The committee also chastised the government for adding weight to “misleading messages” about the potential for hydrogen to replace gas as a fuel for home heating. It said hydrogen was “not a serious option” in the short-to-medium term and the suggestion that it was had a negative impact on take-up for established low-carbon technologies.
Baroness Kate Parminter, who chairs the Environment and Climate Change Committee, said that at the current take-up rate for the BUS, only half of the available funding would be used over the three years of the programme.
“The transition to low-carbon heat is fundamental in the path to net zero, given that 17% of the UK’s greenhouse gas emissions come from our homes,” she said.
“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 said that if the government failed to improve take-up of BUS grants a healthy market of installers and manufacturers will not be in place in time to implement low-carbon heating policy measures smoothly. One consequence would be that the government’s 2028 target of 600,000 installations per year would be extremely hard to meet.
The committee said it had written to energy-security and net-zero minister Lord Martin Callanan, calling on the government to provide businesses and consumers with “greater clarity” on feasible options for low-carbon home heating through a “consistent policy framework”.
Peers are also calling for unallocated funding from the first year of the BUS programme to be rolled over to the second year, and for a review to be conducted into the potential for the scheme to be extended.
Other asks of government include changes to the methodology for Energy Performance Certificates to properly recognise households that switch to low-carbon heating and changes to planning rules to reduce bureaucracy related to the siting of heat pumps.
Yesterday, trade body the Sustainable Energy Association released a report calling for a “technology-agnostic approach” to decarbonising buildings, arguing that a diverse range of low-carbon technologies needs to be incorporated into heat and buildings policy.
The report says the approach would channel investment into a variety of low-carbon technologies at an accelerated rate, maximising the benefits of healthy and cost-effective buildings.
It also suggests that the technology-agnostic approach it advocates will stimulate manufacturing and supply-chain innovation and make best use of available local skills.
SEA chief executive Jade Lewis said government policy for heat and buildings needed to be long term and joined up, and had to take a fabric-first and holistic approach.
“This report lays the foundations as to why these policies should take into consideration a wider range of technologies, so that we can provide homes and buildings with the best solutions for net zero,” she said.
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