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House of Lords Committee inquiry into the Boiler Upgrade Scheme

The House of Lords Committee has found that the Boiler Upgrade Scheme is failing to deliver

Today the Environment and Climate Change Committee has issued a letter to Lord Callanan following a recent inquiry into the performance of the Boiler Upgrade Scheme. It concludes that the BUS is seriously failing and that there is a need for a review of the scheme. It calls for Government to roll over the remainder of year one funding into the second year, promote the scheme further, and help build the installer base. These are important actions Government should take to help households switch to low-carbon heating systems and meet its own 2028 target of 600,000 installations per year.

Commenting on the outcome, Managing Director of NIBE Energy Systems, Phil Hurley said; “I was delighted to speak to the Committee during the inquiry and submit evidence to highlight some of the challenges the industry has faced since the BUS was launched. It is clear that the BUS does not yet reflect the needs of the industry or consumers. In particular, the grant level for Ground Source Heat Pumps is not sufficient and we project that the budget will go unspent. I very much welcome the letter and agree that there must be better advice and a drive to increase public awareness of the scheme. We know that the BUS is failing to deliver upon its objectives, but I hope that this inquiry will provide a clear message to government that the low uptake of grants needs to be addressed.”

The Committee has found:

• Public awareness of low-carbon heating systems is very limited, and promotion of the BUS has been inadequate

• There is a shortage of heat-pump installers & insufficient independent advice for homeowners.

• Hydrogen is not a serious option for home heating for the short to medium-term and misleading messages, including from the Government, are negatively affecting take-up of established low-carbon home heating technologies like heat pumps

• Upfront costs are too high for many households, even with the help of the grant, making it impossible for low-income households to benefit from the scheme.

• While heat pump running costs are becoming competitive with gas boilers in some modelling, progress is urgently needed through electricity market reform to ensure running costs are affordable.

The Committee is calling on the Government to:

• Provide greater clarity to industry and consumers on feasible options for low-carbon home heating through a consistent policy framework, public communications, and householder advice

• Roll over the remainder of the BUS first year budget into the second year and establish a review to consider extending the scheme

• Correct the Energy Performance Certificates (EPC) methodology so that certificates properly reward households for making the switch to low-carbon heating and flawed EPC recommendations cease being a barrier to BUS eligibility

• Upgrade the provision of Government advice, alongside recognising the role of independent retrofit coordinators, to help households navigate low-carbon heating installations

• Relax the requirement arising from Permitted Development Rights to site a heat pump a certain distance from neighbouring properties.

More information

1. The House of Lords Environment and Climate Change Committee considers matters relating to the environment and climate change.

2. The Boiler Upgrade Scheme provides grants for the installation of low-carbon heating systems in domestic and small non-domestic properties. The Committee has examined how effective the scheme has been, and is likely to be, by exploring the experiences of grant applicants and recipients.

3. NIBE Energy Systems submitted written evidence and met with the Committee to discuss industry wide challenges and the concerns raised by NIBE Pro installers.

4. As of 31 January 2023, 9,889 vouchers have been issued worth a total value of £49,730,000. The Committee's position on the take-up rate is based on the total value of vouchers issued. By the same date, 7,641 vouchers have been redeemed, meaning there have been 7,641 installations under the BUS. £150mn has been allocated for each year of the scheme and £450mn is available in total. Source

5. More information about the committee and its membership is available on its website.