UK Government Announces ‘New Approach’ to Achieve NetZero
On 20th September 2023, Prime Minster, Rishi Sunak set out a number of key changes to existing and proposed government policies designed to ensure that the UK is able to achieve its target of Net Zero carbon emissions by 2050.
Central to the announcement were amendments to the existing Heat and Buildings Strategy - originally published in 2021 - which sets out how the UK will decarbonise its homes alongside commercial, industrial and public sector building.
As part of his statement, the Prime Minister described the need for a “fairer, better approach to decarbonising how we heat our homes”. As part of this approach, a number of changes to the Boiler Upgrade Scheme Grant and the timeframe for the phasing out of oil, LPG and Coal fire boilers were laid out.
Boiler Upgrade Scheme
The Boiler Upgrade Scheme became available in Spring 2022 and offers households a no-strings-attached financial contribution towards the cost of replacing their existing gas and oil-fired boiler with a heat pump.
As part of the scheme households were able to claim either £5000 for an air-to-water heat pump or £6,000 for a ground-source heat pump. However, following yesterday’s statement this grant has now been increased by 50% to £7,500 for both types of technology. The increase will become available to all applicants from October 23rd 2023.
Although the amount available has changed, the process for applying for the grant remains the same. Households should contact an MCS Registered Installer who will visit your property and assess it before making an application on your behalf if your home is applicable.
One of the key policy updates was on the banning of oil, LPG and coal fired boilers by 2026 as part of the Heat and Buildings Strategy. This has now been extended to 2035 where a ban on gas-fired boiler replacements will also be expected. From an industry perspective, this means that installers can continue installing traditional boilers for the next decade allowing ample time for the industry to upskill to meet the projected growth in demand for heat pumps as a result of the increased subsidy.
For those who are considering changing their boiler, gas and oil boilers will be available to purchase up to and during 2035.
Clean Heat Market Mechanism
The Clean Heat Market Mechanism is a proposal by government that boiler manufacturers must match or substitute 4% of their boiler sales with heat pumps. If they fail to hit this quota, they will be fined £5000 for every heat pump they were short of their target or they could purchase a credit from a non-obligated heat pump manufacturer to reach this target.
It was announced last night that the Clean Heat Market Mechanism is still going ahead even though the retrofit market for heat pumps is likely to be reduced with the extension of the boiler ban for oil and LPG until 2035. We understand there may be some changes to the target quotas and perhaps to the fines maybe levied against manufacturers but as a principle, the Clean Heat Market Mechanism looks like it is still going to happen.
Where Can I Learn More?
With the expected increase in uptake of heat pumps, we anticipate an influx of questions relating to how customers can find out what model is best suited for their needs and how they can apply for the grant. For those looking to hybrids, the announcement did not include any reference to this technology and at this time there seems to be no intention for allocating the Boiler Upgrade Scheme grant towards hybrids. We have a Q&A page linked here that should answer your questions.
More information is also available here.
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