Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Accepted
Upfront heat pump installation costs remain too high for many households despite grants.
Recommendation
Grants under the Boiler Upgrade Scheme are available to all households irrespective of income. While other schemes are available for low income households, such as the Social Housing Decarbonisation Fund, Home Upgrade Grant and the Energy Company Obligation, DESNZ explained that the Boiler Upgrade Scheme is designed for the able- to-pay market. The £7,500 grant covers nearly 60% of the average cost of installing a heat pump, based on the average cost in 2023.11 An energy industry representative, the Energy & Utilities Alliance, told us in its written evidence to us that by definition, only those households who can afford to pay the remaining amount to top up the grant can afford to participate in the Scheme.12 According to the Energy Saving Trust, this creates a gap in support for those who are ineligible for fuel poverty schemes but are unable to afford the total upfront cost of switching to a low carbon heating system.13 Similarly, the MCS 5 Qq 3, 49; C&AG’s Report, paras 15–16. Installation cost figures represent real-term reduction compared to the cost in 2021 6 Qq 3, 30, 119; C&AG’s Report para 16 7 DHH0015, Written evidence submitted by The Building Societies Association, 29 April 2024; DHH0043, Written evidence submitted by Calor Gas, 29 April 2024; DHH0046, Written evidence submitted by Good Energy, 29 April 2024; DHH0053, Written evidence submitted by Centrica, 29 April 2024 8 Qq 3, 10, 30; C&AG’s Report, para 15 9 Qq 11, 43 10 Qq 11, 43; C&AG’s Report, para 3.19 11 Qq 30, 54–55; C&AG’s Report, para 15 12 DHH0040, Written evidence submitted by Energy & Utilities Alliance, 29 April 2024 13 DHH0026, Written evidence submitted by Energy Saving Trust, 29 April 2024 Decarbonising home heating 11 Foundation told us that upfront costs were too high for many households even with the help of a grant, making it “impossible for households without savings to benefit from the scheme”.14 Energy UK, a representative body for the energy industry, called for the costs to be
Government Response Summary
Government agrees with the recommendation and commits to writing to the Committee by Spring 2025 upon publication of interim findings from the Boiler Upgrade Scheme evaluation, detailing heat pump uptake among different socio-economic groups.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2025 1.2 The Department for Energy Security and Net Zero will write to the new Committee upon publication of the first set of interim findings from the Evaluation of the Boiler Upgrade Scheme, which is expected to take place in Spring 2025. This correspondence will highlight, amongst other things, the details of heat pump take-up amongst different socio-economic groups.