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Households wanting to switch from oil or LPG heating systems to a heat pump can get an increased grant to do so, the Government announced today (April 21).
Under the Boiler Upgrade Scheme (BUS), homeowners can get £7,500 grant towards replacing their existing gas or oil heating system with an air source or ground source heat pump. This now rises to £9,000, but only for those switching from oil or LPG to a heat pump.
Alongside this announcement, the Government has released plans to unhitch the costs of electricity from wholesale gas prices, something that Wolseley UK called for in its report launched at the Houses of Parliament last year.
Voluntary long‑term fixed contracts will be offered to existing low‑carbon generators not currently on fixed prices to protect consumers from sudden bill increases when gas prices spike.
There will also be an updated Electricity Generator Levy, increasing the rate from 45% to 55%, meaning that a bigger share of boosted profits made during gas price spikes is returned to government.
Prime Minister Keir Starmer said: “We need to get off the fossil fuel rollercoaster – this will make energy bills more stable and take the pressure off family budgets. When global gas prices spike, people here shouldn’t be picking up the tab. Our focus is simple: easing pressure on household budgets now, while building a homegrown energy system that protects families from global instability in the years ahead.”
Energy Secretary Ed Miliband said: “As we face the second fossil fuel shock in less than five years, the lesson for our country is clear: The era of fossil fuel security is over, and the era of clean energy security must come of age. That’s why we’re doubling down on clean power, to give our country energy security and bring down bills for good., helping support households and businesses facing higher living costs.”
Martyn Bridges, director of external affairs at Worcester Bosch says the moves are positive for number of oil and LPG users in the UK. “There are a few reasons why we’ve seen this announcement today. First, it is driven by the volatility of oil prices since the crisis in the Middle East, which has seen domestic heating oil prices double. Secondly, it is also likely down to the estimated underspend (as of 31 March) of the Boiler Upgrade Scheme (BUS) of around £65m, which signals that growth in retrofit heat pumps is starting to flatline and further action is required to make this government policy look like it’s succeeding.
“While finance is a big motivator, I think it’s not the only factor in people’s reluctance to change from a boiler system to a heat pump system. There are many thousands of homes with an externally sited oil-fired combination boiler, and whilst a heat pump sits outside the property, the required hot water storage cylinder is mostly installed inside, where space is precious – meaning it’s not a good fit for households that simply don’t have the internal room to spare.”
