Heat Pump Demand Has Nearly Doubled In The Last Year

Daniel Särefjord, the CEO of Aira UK, has reacted to the Boiler Upgrade Scheme official statistics, published by the Department for Energy Security and Net Zero. Following the recent 2-year anniversary of the scheme, government figures have revealed that heat pump sales have nearly doubled in the last 12 months and sales continue to surge.

• The total number of Boiler Upgrade Scheme applications in April 2024 (2,138) was 93% higher than the volume received during the same month of the previous year (April 2023; 1,233). There was also an 11% increase in applications from the previous month.
  
  
• The Boiler Upgrade Scheme has a monthly budget of £12.5 million, that’s roughly 1,666 BUS grants per month. Since the Prime Minister’s relaunch of the Boiler Upgrade Scheme in October 2023, when the funding was increased to £7,500, DESNZ has received on average 2,136 boiler scrappage grant applications per month. This shows that the BUS scheme is exceeding expectations. 

Daniel Särefjord, Aira UK CEO 

“Without doubt one of the key drivers behind heat pump sales doubling was the government’s decision to introduce a £7,500 grant, helping families to scrap their polluting gas boiler and replace it with an environmentally friendly heat pump. 

This helping hand has raised awareness of the benefits of innovative heat pump technology, such as lower heating costs, greater energy security for the UK and a 75% reduction in heating-related carbon emissions and air pollution in comparison to a domestic gas or oil boiler.

After the election, I hope the new government will prioritise this transition and work closely with the British heat pump sector to meet our climate commitments, decarbonise homes and secure a fair deal for UK residents. In the next parliament, our much-needed energy transition will depend on MPs scrapping planning policy red tape, rebalancing the taxes and levies on electricity and gas, as well as continuing and progressing the nation's subsidy offering.”

The Department for Energy Security and Net Zero update follows:

• Heat pumps a more affordable and attractive option for families as demand continues to soar with applications in April up 93% year-on-year
• Supplier offers and cheaper heat pump electricity tariffs helping to drive uptake
• More than £148 million has been paid out for installations since scheme started

More people want low-carbon upgrades to their homes, as heat pump applications almost doubled year-on-year according to the latest figures. 

As the Boiler Upgrade Scheme marks its 2-year anniversary (Thursday 23 May), demand for heat pumps has surged with applications up 93% in April, compared to the same month in 2023.

The increase is fuelled by offers from energy suppliers which can make some heat pump installations a similar price to fitting a gas boiler, and the introduction of cheaper electricity tariffs – reducing running costs. 

Heat pumps capture heat from the air, ground or water to provide heating and hot water without using fossil fuels. They are three times more efficient than gas boilers, reducing home emissions and helping the UK’s meet its net zero goals. 

Grants for heat pumps increased by 50% last October as part of the government’s plan for a pragmatic approach to reaching net zero, making the Boiler Upgrade Scheme one of the most generous of its kind in Europe. 

More families in England and Wales have now taken advantage of this support, with the average monthly applications between November and April up 49% to 2,136 applications compared to 1,435, the monthly average before grants were increased. 

This comes as recent statistics show the UK is halfway to net zero – having over delivered on every carbon budget to date.

Energy Security Secretary Claire Coutinho said:

The latest numbers from our Boiler Upgrade Scheme show that for more and more families, the switch to a heat pump is starting to make financial sense. 

Our plan is to give families a helping hand, rather than forcing them to make expensive changes before they are ready.  

That’s why we increased the support available through the scheme to £7,500 – making it one of the most generous in Europe. 

Applications in April have doubled year-on-year, meaning more families are saving money.

Minister for Energy Efficiency and Green Finance Lord Callanan said: 

A 93% increase in applications year-on-year in April shows our decision to increase grants for heat pumps was the right one, making it easier for households to switch to cleaner heating. 

Heat pumps are three times more efficient than gas boilers and more and more people are enjoying the benefits, without large upfront costs.

Data released by Ofgem also shows that there have been more than 40,000 applications in total, with the scheme having paid out over 25,000 grants, with more than £148 million issued. 

The target for 600,000 heat pump installations a year by 2028 is backed by government support, as well as innovation from business.

Industry is taking steps to make heat pumps a more affordable and attractive option.

In some cases, Boiler Upgrade Scheme funding means suppliers can offer heat pump installations at a similar price to a gas boiler, with Octopus Energy and British Gas both offering complete heat pump installations from £500. 

More is being done to bring down running costs, through electricity tariffs designed specifically to work with heat pumps. For example, the Octopus Cozy electricity tariff can save heat pump users £96 compared with a standard flexible tariff.

And Ovo’s Heat Pump Plus tariff allows customers access to a reduced electricity rate (15p/kWh) for any electricity used by a heat pump. 

Industry is also innovating and pushing forward the uptake of low-carbon heating, with the creation of smaller heat pumps, hybrid heat pumps which can be installed alongside an existing gas boiler, and high temperature heat pumps, which could provide an option for less efficient homes and reduce the need for new radiators and extra insulation. 

To support the increasing demand for heat pump installations, government has already put in place the £5 million Heat Training Grant.  

So far this has funded training for around 3,000 heat pump installers since July 2023 and will provide around 10,000 opportunities before April 2025 for heat pump and heat network professionals. 

Source : Aira UK; Department for Energy Security and Net Zero

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