Heat pumps will still cost households thousands of pounds each even after they have used the Government’s troubled voucher scheme, a minister has admitted.
Lord Callanan, a junior energy minister, said some consumers would pay “as little” as £2,500 for the eco-friendly heating systems after a grant of £5,000 was taken into account.
His admission comes after critics blamed the high cost of heat pumps for the “embarrassingly” low uptake of the £150m-a-year boiler upgrade scheme.
Official figures show that fewer than 10,000 households have taken advantage of the grants since its launch last May.
A typical household will end up paying between £7,000 and £13,000 to install an air source heat pump before any voucher discount is applied, according to the Energy Saving Trust.
In a letter to peers, Lord Callahan said the Government will review the maximum grant level and could still increase it, leaving the door open to even more support being offered.
He said the current rate of support – a £5,000 voucher for an air source heat pump, or £6,000 for a ground source one – was decided based on consumer research and data from previous government grant schemes.
However, the figure is lower than the £9,000 handed out on average to households buying air source heat pumps under the domestic renewable heat incentive (RHI), which was scrapped last year.
This represented better value for money for taxpayers, he claimed, and has sped up the rollout of heat pumps. 840 a month are being installed under the boiler upgrade scheme, rising from 590 a month under the RHI.
The minister added: “The current grant levels mean that some consumers will pay as little as £2,500 when installing an air source heat pump, once the grant has been taken into account.
“Moving forward this could be even less where households are able to access additional incentives through mortgage lenders.
“We continue to keep the evidence for the grant levels under review… to ensure these are appropriate to incentivise consumer demand but also represent value for money.”
Lord Callanan was responding to a letter from the House of Lords environment committee, which said the boiler upgrade scheme is well-meant but “seriously failing” to meet its aims.
The National Infrastructure Commission has warned that on present trends, the government will miss a 2028 target for installing 600,000 heat pumps per year by a wide margin.
Ministers have extended a marketing campaign to raise awareness about the government vouchers in an effort to boost take up.
Baroness Parminter, chairman of the Lords committee, said: “The commitment to enhance the current marketing campaign is welcome, but it remains unclear as to its scale and whether it will be sufficient to address the woeful lack of awareness of the scheme and why we need to switch to this mature net zero home heating technology.”
A mass uptake of electric heat pumps to replace the gas-powered boilers found in most homes today is a key plank of the UK’s plan to reach “net zero” carbon emissions by 2050.
The boiler upgrade scheme was meant to jump-start that process by stimulating demand, which would help manufacturers to scale up production and drive down costs.
However, the low uptake has left both those goals in doubt. Only one third of a possible 30,000 vouchers were claimed in the scheme’s first year.
https://news.google.com/rss/articles/CBMiW2h0dHBzOi8vd3d3LnRlbGVncmFwaC5jby51ay9idXNpbmVzcy8yMDIzLzA0LzI2L2hlYXQtcHVtcC12b3VjaGVycy1lbmVyZ3ktYmlsbHMtaG91c2Vob2xkcy_SAQA?oc=5
2023-04-26 11:46:00Z
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