Source · Select Committees · Environmental Audit Committee
Recommendation 30
30
Accepted
Increase overall funding envelope for the Boiler Upgrade Scheme, subject to uptake
Recommendation
We welcome the 50% increase permitted for individual grants under the Boiler Upgrade Scheme, and we would wish to see the overall envelope of funding increased subject to sufficient uptake. (Paragraph 162) The financial sector and the UK’s net ero transition 63
Government Response Summary
The government confirms the increase in Boiler Upgrade Scheme grants to £7,500 and announces an additional £1.5 billion in funding for the scheme's extension from 2025-2028, directly addressing the call for an increased funding envelope.
Government Response
Accepted
HM Government
Accepted
The Government is committed to supporting the low carbon heat market and reaching our ambition of 600,000 heat pumps a year by 2028. However, the capital cost gap between fossil fuel systems and heat pumps remains a barrier for customers. That is why on 23 October 2023, we increased the grant level for heat pumps under the Boiler Upgrade Scheme to £7,500. The uplift is designed to improve access to the scheme by covering more of the upfront cost differences of a heat pump and makes it one of the most generous schemes of its kind in Europe. We also announced on 18 December 2023 £1.5 billion of funding for the BUS extension from 2025–2028. This additional funding and extension to the scheme should give industry the certainty needed to invest confidently in heat pumps. In the meantime, we have a confirmed budget of £150m for financial year 23/24 and for financial year 24/25. The budget is currently underspent so there is room for significant growth in the market.