Hydrogen ‘mixed messages’ undermine boiler scheme

Government “mixed messaging” and “misinformation” about hydrogen’s future role in home heating is unhelpful because the fuel is “not a serious option in the short to medium-term”, peers have warned.

In a letter to junior energy minister Lord Callanan, the House of Lords environment and climate change committee says take up of the government’s Boiler Upgrade Scheme (BUS) grants has been “disappointingly low”.

The committee concludes that the uptake in the BUS is “undermined” by government messaging on hydrogen.

If the current take-up rate of grants continues, only half of the scheme’s allocated £450 million budget will be used to help households switch to low-carbon heating systems, the letter states, which outlines the conclusions of the committee’s recent inquiry into the BUS.

The government has earmarked £150 million per annum for the scheme, which offers grants of up to £6,000 to households that replace fossil fuel boilers with low carbon alternatives like heat pumps, from 2022 to 2025.

However, according to the latest figures from the scheme’s administrator Ofgem, the total value of BUS vouchers issued by the end of January was worth just £49.7 million.

The letter says the scheme has been bedevilled by wider government policies, which have failed to provide certainty to installers and consumers about the future shape of domestic low-carbon heat.

It says: “Mixed messaging around the use of hydrogen for home heating is similarly unhelpful, given that hydrogen is not a serious option in the short and medium-term for home heating and any use for this purpose in the long-term is likely to be limited.

“Keeping the option of hydrogen open, including through the recent consultation on hydrogen-ready boilers, is negatively affecting take-up of established low-carbon heating technologies like heat pumps.

“The high level of misinformation and confusion that exists around hydrogen—not helped by mixed messages from government such as the hydrogen-ready boiler consultation—is undermining take-up of heat pumps.”

It says it is also “unhelpful” that the government’s ambition to phase out gas boilers by 2035 has not been “put forward in stronger terms”.

And the committee expresses concerns that plans for a further marketing campaign for the BUS will not be of the scale needed to ensure the scheme is a success.

A “stronger indication” about how the £6 billion of energy efficiency cash, recently announced by chancellor of the exchequer Jeremy Hunt for 2025-28, will be allocated would also be beneficial.

The committee says it is “disappointed” that the government has not committed to roll over the remainder of the first year’s BUS budget, especially given the scheme opened weeks after the beginning of the financial year and the portal for applications only came online in late November 2022.

It calls on the government to roll over the remainder of the BUS first year budget into the second year and establish a review to consider extending the scheme.

The government told the committee that the budgeting principle of annularity, which means authorised spending must take place in the related year unless there are exceptional circumstances, is the reason why the funds cannot be rolled over.

The letter asks whether delayed launches of the BUS and the digital portal can be considered as exceptional circumstances that might justify rolling over the first year’s budget.

Baroness Parminter, chair of the environment and climate change committee, said: “The government must quickly address the barriers we have identified to a successful take-up of the Boiler Upgrade Scheme in order to help grow the take up of low-carbon heating systems. It is vital they do so if we are going to meet our net zero ambitions.”

Responding to the report, a government spokesperson said: “The Boiler Upgrade Scheme has already paid out £38.3m of vouchers to installers.

“We’ve recently launched a marketing campaign to further increase public awareness and will consider options to ensure our targets are met.”