Heat pump proposals ‘cut all the wrong corners’

Proposals to simplify the eligibility criteria for heat pump grants by removing the need for loft or cavity wall insulation have been described as “cutting all the wrong corners”.

The comments were made in response to government proposals aimed at boosting the heat pump rollout through updates to the Boiler Upgrade Scheme (BUS).

Under current rules a property seeking an installation with support from the BUS is required to have a valid Energy Performance Certificate (less than 10 years old) with no outstanding recommendations for loft or cavity wall insulation.

However, the government has said that while some installers operating under the scheme recognise the importance of EPCs as an eligibility criterion, others say they are a “barrier to uptake” and should be removed.

“Where concerns have been raised by installers about EPC requirements under the scheme, it is not clear whether it is the requirement to have a valid EPC that is considered a barrier or whether it is the specific requirement to have no outstanding recommendations relating to loft or cavity wall insulation,” the Department for Energy Security and Net Zero (DESNZ) said.

It further pointed to the House of Lords’ Environment and Climate Change Committee’s inquiry into the BUS which concluded that the use of EPC ratings and the insulation requirements should be removed as they act as a barrier for some households and contribute to misconceptions about the relative cost of installations compared to other technologies. It also said households should have access to reliable advice on how running costs differ according to the levels of insulation.

DESNZ said: “We want to strike an appropriate balance between ensuring that heat pumps are only installed in suitable properties whilst avoiding imposing any disproportionate requirements on consumers and installers. The government therefore committed in its response to the Lords’ inquiry to consult on whether to make a change to the EPC requirements when reviewing the scheme regulations.

“We would welcome further feedback and evidence on whether to retain the current requirement to have a valid EPC with no outstanding recommendations relating to loft or cavity wall insulation in order to be eligible for the scheme.”

Other proposals announced by the government include potentially varying the level of grants made available to customers depending on their property type or existing fuel source, as well as amending the regulations to allow some biomass boilers to be eligible for the BUS if they have a cooking function.

Yet while the move to improve the availability of the BUS to more consumers has been welcomed, concerns have been raised about the fact the government is considering whether to remove the requirements around EPC ratings.

Greenpeace UK’s climate campaigner, Georgia Whitaker, said: “While the government is absolutely right to make the installation of heat pumps cheaper and more accessible, removing the need for insulation is cutting all the wrong corners.

“Insulation is the quickest and easiest way to slash household carbon emissions and reduce energy use – saving people up to a thousand pounds a year on their bills. Better insulation also makes heat pumps more efficient.

“Rather than taking one step forward, two steps back, the government should be ramping up investment for both heat pumps and insulation – delivering a nationwide programme to make homes warmer, cleaner and cheaper to run side-by-side, not pitting one energy-saving scheme against the other.”

Bean Beanland, director for growth & external affairs at the Heat Pump Federation, told Utility Week he believed that the focus should be on better insulation across the board, regardless of how customers heat their homes.

Beanland said his organisation would consult with its members, as well as other organisations across the industry, on the government’s proposals.

Giving his personal thoughts to Utility Week, he added: “Steps should be taken to encourage everybody to insulate their homes better regardless of fuel type. EPCs are up for significant reform which is a good thing because they are currently a problem in themselves. But we should be doing everything we can, given the high cost of living, to encourage people to better insulate their homes and that is a fundamental missing part in energy policy in the UK at the moment.”

Meanwhile Jess Ralston, energy analyst from the Energy and Climate Intelligence Unit, said: “This move would mean the UK’s levels of support for installing heat pumps becomes more closely aligned to other nations, including lots of EU countries, the US and Australia. The rest of the world has been slowly ramping up heat pump deployment for some time, so much so that there are now 20 million installed in Europe and the US sold more heat pumps than gas boilers last year.

“It seems the government has recognised we’re falling behind, which is threatening our energy security, and wants to catch up with countries like Poland and Estonia, which have far higher numbers of heat pumps per person. This could also boost the UK’s heating industry, which faces losing £65 million worth of exports each year if we go slow on heat pumps.”

Lord Callanan, minister for energy efficiency and green finance, said: “Heat pumps are a vital tool in cutting the carbon emissions from people heating their homes, while also helping to drive down costs and boosting our energy security.

“While a heat pump can be installed for a similar price to installing a gas boiler, the support we’ve put in place means it is an option for more and more households.

“Today’s changes go even further and will mean even more people could benefit from making the switch, offering them the option for a low-emission, low-cost form of heating their homes.”

Elsewhere Ofgem has released the latest statistics for the BUS which show that as of 31 July this year, more than 21,000 voucher applications had been received since the scheme began in May 2022. Of these more than 16,000 were issued at a value of £81.2 million.

While the value of vouchers issued in the last quarter was the highest to date, the redemption rates actually lagged behind the previous three quarters, at £14.7 million, compared to high between November and January of £17.8 million.

A third of the way through the second year of the scheme, which began on 1 April, just over £30 million of the £150 million budget has been spent. Last year almost £100 million allocated to the scheme went unspent.