Recommendation 20

HM Government Acknowledged

The design of the Boiler Upgrade Scheme (BUS) has been heavily informed by scrutiny of the Green Homes Grant Scheme. The targeted scope of the scheme, flat rate grant and installer-led application will all contribute to a simpler and more effective policy that is easier for customers to understand. Ofgem, the scheme administrator, have extensive experience of delivering schemes on behalf of the Government, such as the Domestic Renewable Heat Incentive. The policy was originally consulted on in 2020 and industry have been provided with early sight of the scheme requirements through the publication of the government response in October 2021 and draft statutory instrument in December 2021. Monitoring plans are in place to ensure that any issues with delivery of the BUS are identified at an early stage and can be acted upon. most expensive and/or complicated installations to decarbonise. This will require a fundamental rethink on the support packages currently available. The boiler replacement grants of £5,000 or £6,000 will mean lower income households cannot switch to low carbon heating, when the overall cost may be as high as £15000–£20,000. The Boiler Upgrade Scheme is targeted at growing demand for low-carbon heating within the owner-occupier segment of the market ahead of the introduction of regulations and market-based approaches later in the decade. The Government is providing financial support to lower income households through a range of other schemes, including Home Upgrade Grant and Social Housing Decarbonisation Fund. The Home Upgrade Grant will provide energy efficiency upgrades and low carbon heating to low-income households living off the gas grid in England to tackle fuel poverty and support the net zero commitment. The government has allocated a total of £1.1 billion to the scheme, which will run from early 2022 to March 2025. Eligible low-income households will not have to pay anything towards the upgrades. The Social Housing Decarbonisation Fund (SHDF) will upgrade a significant amount of the social housing stock currently below EPC C up to that standard, delivering warm, energy-efficient homes, reducing carbon emissions and fuel bills, tackling fuel poverty, and supporting green jobs. Low carbon heat installations may be installed through the SHDF where these are in alignment with the objectives of the scheme. In the Heat and Buildings Strategy and Net Zero Strategy, it was announced that £800 million has been committed for the Social Housing Decarbonisation Fund as part of the 2021 Spending Review process. Incentivise banks to create low-cost loan products for consumers Catalysing the market for green finance is a priority for the Government to help support and encourage homeowners to access affordable, low-cost finance for home energy performance improvements. A consultation was published in November 2020 on the role mortgage lenders can play in supporting homeowners to improve their energy performance. In addition to this, £10 million has been made available through a Green Finance Accelerator Programme to support the development of innovative green finance products to incentivise action in the owner-occupied sector. We announced a doubling of this funding to £20 million in the Energy Security Strategy. The number of green finance products on the market is increasing, with the release of almost thirty green mortgage products in the last two years. This will create extra financing opportunities to support the Boiler Upgrade Scheme. For example, there is potential for lenders to offer additional borrowing to top up grants. The Government is working with industry and trade unions to ensure that appropriate high-quality training is available, both for new entrants to the sector and existing heating installers who do not have heat pump experience. The implementation of the Green Jobs Delivery Group, a commitment in the Net Zero Strategy, will bring together industry and other key stakeholders to ensure the UK has the workforce needed to deliver a green industrial revolution. The Group will include Ministerial representation and will be co- chaired by an industry representative. Focusing more specifically on heat pumps, BEIS also convenes the Electrification of Heat Task Group, a joint initiative between Government, industry and civil society organisations. This Task Group has developed a skills action plan and BEIS will continue to work with industry and trade unions to deliver the actions it sets out. In August 2021, the Heat Pump completed in under a week. In September 2020, the Government spent £6 million on a skills training competition which provided nearly 7000 training opportunities for the energy efficiency and low carbon heating supply chains. Industry has capacity to upskill over 7000 heating installers per year to install heat pumps. This is sufficient to ensure there are enough installers to meet our 2028 deployment target, if training is taken up. Industry is also investing in ad