UK heat-pump installers say reported Boiler Upgrade Scheme cuts could weaken demand by reducing help with upfront costs, as the government prepares its Budget for Wednesday.
Energy Minister Martin McCluskey said in a written parliamentary answer published Friday, Oct. 23, that the scheme has a £400 million budget for the 2026/27 financial year. He said support after that year will depend on future Budgets and Spending Reviews.
The Guardian and Financial Times have reported that ministers are considering cuts ahead of the Wednesday, Oct. 28, Budget. The government has not announced whether any change would affect the scheme’s total funding, grant amounts or eligibility.
The installer-led program covers homes and non-domestic buildings in England and Wales. It offers £7,500 for eligible air-to-water and ground-source heat pumps. Eligible off-gas-grid homes replacing oil or liquefied petroleum gas (LPG) heating can receive £9,000 through March 31, 2027.
The Department for Energy Security and Net Zero (DESNZ) has set out £2.687 billion in Boiler Upgrade Scheme allocations from 2025/26 through 2029/30, including £400 million for 2026/27. The Warm Homes Plan aims for more than 450,000 heat-pump installations a year by 2030. DESNZ estimates that, before a grant, a heat pump costs an average of £9,000 more than replacing a fossil-fuel heating system. In a government survey, 69% of property owners said the grant was a reason they went ahead with an installation.
The Guardian quoted Jim Lacey of JLN Plumbing & Heating saying, “No one’s going to save the planet if it really hits their pocket.” The outlet also reported that Bill Tuck, operations director at Sustain Homes, said about 75% of his customers use subsidies for heat pumps. Tuck warned, “It’s going to damage us as a company.”
The Guardian also reported a past example involving the Renewable Heat Incentive. Installer Adam Killa told the outlet his business went from six to eight heat-pump installations a week to none after the program stopped taking new applicants. Ofgem says the domestic scheme closed to new applications on March 31, 2022; Killa’s figures describe his own business.
The government has required DESNZ to find £2 billion in additional savings while funding a £15 billion increase in defense spending over four years. It has not identified the Boiler Upgrade Scheme as a source of those savings. The Budget is scheduled for Wednesday, Oct. 28.
