Written by Jonny Hancock, Product Manager at NIBE Energy Systems
If you’re a heating installer, chances are you have heard all about the Government’s ambitions to change the way homes are heated. A greater focus on climate change and the need to become energy independent in the UK has left us with no other option but to shift away from fossil fuels. But how much appetite is out there for low carbon heat amongst homeowners? This short blog explores the impact of the recently closed Domestic Renewable Heat Incentive (DHRI) and its effectiveness in increasing the uptake of low-carbon heating solutions like heat pumps, before looking ahead to the Boiler Upgrade Scheme (BUS) due to launch this May.
A look back at the Domestic Renewable Heat Incentive
The recent release of statistics for DRHI over its eight-year duration provide us with confidence that interest in heat pumps is ever-rising, with applications steadily increasing since it began in 2014. As highlighted below, applications saw a steady rise from 2018 onwards and peaked in the first quarter of 2022.
One thing this shows us is that demand for low carbon heating systems is growing, giving us every reason to believe that uptake could keep on rising in the years ahead. This will however need to be aided by government support in the way of policy, funding and awareness building.
Demand for Heat Pumps
Whilst eligible technologies under the scheme included both air source and ground source heat pumps, biomass and solar thermal, applications for air source heat pumps proved most popular year upon year. As shown below, applications for air source heat pumps steadily increased from 36% in 2014 when the scheme began to 82% in 2022 (Q1) when it closed. Other technologies instead experienced a steady decline during this time, with solar thermal applications actually falling from 21% in 2014 to 2% in 2022. Applications for ground source heat pumps also declined, but to a lesser degree, from 16% in 2014 to 14% in 2022.
Whilst the benefits of low carbon heating systems are widely understood, so are the challenges with installing them at the scale required to meet UK climate targets. Whilst the high proportion of applications for heat pumps under DRHI has instilled more confidence in the heat pump market and enabled the growth of MCS registered installers, applications under the scheme, in general, were still lower than anticipated. Part of the reason for this is the way in which the funding was delivered, with the payments being issued to households as back payments following the initial installation over a long period of time. The scheme was therefore of very little help to those without the upfront capital to purchase a low carbon heating system to begin with, despite being an attractive proposition to those with the available funds.
Acknowledging that upfront funding is needed to enable more households to install a heat pump and enjoy the benefits of low carbon heat, the Government’s Boiler Upgrade Grant scheme will offer £5,000 grants for the purchase of air source heat pumps and £6,000 for ground source heat pumps. The scheme officially opens for applications on 23rd May 2022, although applications from 1st April will be eligible.
The Boiler Upgrade Scheme
Open to households and small non-domestic properties in England and Wales, the Boiler Upgrade Scheme (BUS) could see heat pumps installed in 90,000 homes by 2025. Whilst this is just a fraction of the 26 million homes that need to be decarbonised, there are hopes that the scheme will help to boost uptake of the technology in combination with other plans outlined by the Government – one of which is the Future Homes Standard which will see all new homes built ‘net zero ready’ from 2025.
How can Installers get involved in the Boiler Upgrade Scheme?
Click here to find out more: Installers Guide to BUS.