Boiler Upgrade Scheme

The UK government launched a new Boiler Upgrade Scheme (from 1st April 2022) for homeowners in England and Wales.

The Boiler Upgrade Scheme is part of the UK’s Heat and Buildings Strategy to cut carbon emissions from our homes to tackle the climate change emergency.

The scheme was previously known as the Clean Heat Grant.

The scheme will offer grants of up to £6,000 for existing properties to encourage homeowners to upgrade their gas boilers and install low carbon heating systems such as heat pumps and in limited circumstances biomass boilers.

The scheme is available for domestic and small non-domestic properties and will run from 2022 to 2025 to address the negative impact of heating.

1. What is the Boiler Upgrade Scheme?

The government scheme, formerly known as the Clean Heat Grant, will help reduce the overall cost of removing existing fossil fuel systems and replacing them with new low carbon heating technologies such as air source heat pumps, ground-source heat pumps and biomass boilers.

The main aim of this scheme is to reduce carbon emissions emitted by homes.

The scheme is available only to those living in England and Wales from the commissioning date of 1st April.

Timelines of the scheme

  • 1 April 2022 – Low carbon heating systems that are commissioned on or after this date will be entitled to support under the scheme. (Commissioning is the completion of installation and set up of the system).
  • 11 April 2022 – Installers will be able to open an account for the scheme with Ofgem, the scheme administrator.
  • 23 May 2022 – The scheme opens for grant applications and payments.
  • April 2025 – The scheme closes

2. How will the Boiler Upgrade Scheme work?

The Boiler Upgrade Scheme (formally the Clean Heat Grant) has funding of £450 million and will operate on a first-come, first-served basis. It will be available for a maximum of 90,000 homes (those that meet the eligibility criteria) over the next three years.

The scheme will see the government contributing a fixed sum towards the cost of replacing old boilers with a renewable heating system in properties – including some non-domestic buildings.

This scheme is designed as part of a broader response to incentivise people to look at energy efficiency in existing homes to help reduce our overall demands on fossil fuels.

All new applicants will need to find a suitable heat pump installer who will apply for the grant, and the value of the grant will be discounted from the price paid to help drive down the upfront costs of installations.

Steps to get the grant:

  1. Find an MSC certified installer in your area that is able to carry out the work. (The MCS quality assurance scheme ensures that installers are competent, and the products they use meet the correct standards.)
  2. The installer will advise you on whether an installation is eligible for a grant (you have a valid EPC, don’t require cavity wall insulation etc).
  3. Once you have agreed on a quote for the installation the installer will apply for the grant on your behalf.
  4. You will need to confirm that the installer has been appointed by you to act on your behalf when you’re contacted by Ofgem.
  5. The installer will receive a voucher that will need to be redeemed within 3 months for air source heat pumps or biomass boilers or 6 months for ground source heat pumps.

As with all such things, it is highly recommended that you get quotes from multiple heat pump installers before proceeding.

Which low carbon heating systems are eligible?

  • Air source heat pumps
  • Ground source heat pumps
  • Water source heat pumps (considered in the same category as GSHPs by the government)
  • Biomass boilers but only in rural areas (fewer than 10k residents). The boiler will need to replace an existing fossil-fuelled system (not including mains gas connection) or electric heating system (not including heat pumps).
Air Source Heat Pump
ASHP
Ground Source Heat Pump
GSHP
Water Source Heat Pump
WSHP
Biomass Boiler
Biomass Boiler

Why are Biomass boilers restricted to non-urban areas?

There was limited support for biomass installations (Future Support for Low Carbon Heat: Boiler Upgrade Scheme) in urban areas due to air quality concerns, however, some said that such boilers already meet high emissions standards.

3. Who is eligible for the Boiler Upgrade Scheme?

Eligibility for the Boiler Upgrade Scheme is based on the following requirements:

  • You will need to live in England or Wales
  • Own your property (whether this is a home or a small non-domestic property)

The property will need to have:

  • An installation capacity up to 45kWth (this covers most homes)
  • A valid Energy Performance Certificate issued in the last 10 years with no outstanding recommendations for loft or cavity wall insulation (unless you have an insulation exemption).

The scheme isn’t available for those in social housing (there are other government grants available such as the Social Housing Decarbonisation Fund that may help) and new-build properties (the only exception is if you’re building your own home).

The scheme isn’t available if you live in Northern Ireland or Scotland (see…).

Can I use the Boiler Upgrade Scheme to replace heat pumps?

Funding will not be available for the replacement of existing low carbon systems. Only properties which are fully replacing existing fossil fuel systems (such as oil, gas or direct electric) will be eligible for support.

4. How much funding is available through the Boiler Upgrade Scheme?

The amount of funding available to upgrade fossil fuel boilers is:

  • £5,000 off the cost and installation of an air source heat pump
  • £5,000 off the cost and installation of a biomass boiler
  • £6,000 off the cost and installation of a ground source heat pump

The grant will only cover biomass boilers in rural locations and in properties that are not connected to the gas grid.

5. Will the scheme cover the whole cost of installing a heat pump?

Unfortunately, no, it will not cover the complete cost. The Boiler Upgrade Scheme is designed to help reduce the overall cost of installing a low carbon, renewable heating system.

For the fortunate 90,000 who are eligible for the scheme, the average cost of an air source heat pump will go from around £10,000 to £5,000, making it a viable alternative to installing a new gas boiler and a cost-effective way to reduce carbon emissions.

Ground source heat pumps are typically in the range of £15,000-£20,000, depending on the groundwork required. £6,000 will certainly help reduce the overall costs but a GSHP will remain a more costly up-front solution to heat your home.

6. How long will grant vouchers last?

The installer will receive a voucher that will need to be redeemed within 3 months for air source heat pumps or biomass boilers, or 6 months for ground source heat pumps.

7. What are people saying about the Boiler Upgrade Scheme?

The scheme, formally known as the Clean Heat Grant, is a move in the right direction for green homes, but it falls short of what is needed to hit the UK’s commitments to achieve net-zero emissions by 2050.

The UK Government is not being ambitious enough with the Boiler Upgrade Scheme, limiting help to the first 90,000 applicants to upgrade boilers to a new renewable energy system, between now and 2025.

The Committee on Climate Change (CCC) have published the Development of trajectories for residential heat decarbonisation to inform the Sixth Carbon Budget, that for the UK to meet targets, there is a need for “a major acceleration in heat pump deployment”.

Going on to say:

The envisaged deployment levels up to 2030 – particularly for heat pumps – are ambitious but achievable, being almost at the limit of constraints considered “achievable at a stretch” based on external expert stakeholder feedback in the industry

https://www.theccc.org.uk/wp-content/uploads/2020/12/Element-Energy-Trajectories-for-Residential-Heat-Decarbonisation-Executive-Summary.pdf
Table showing a comparison of balanced pathway scenario heat pump deployment against technology deployment limits.

Others have been critical that the scheme is more limited and doesn’t cover as many renewable energy technologies as the now-defunct Domestic Renewable Heat Incentive (RHI).

The Domestic RHI was open to all households, on and off the gas grid, and provided payments to those that the eligibility criteria. The scheme paid out quarterly over seven years.

8. When does the Boiler Upgrade Scheme end?

The Boiler Upgrade Scheme will run from April 2022 until April 2025. There are suggestions it may be extended, but so far no government response confirming this.

9. How Is It Different from the Domestic RHI?

From a payment perspective, a maximum of £6,000 is paid out by the government, to help reduce the upfront costs, for those eligible for the boiler upgrade scheme.

With the RHI scheme (predecessor to the clean heat grant), and for a seven-year period, you were able to earn annual payments based on your annual heat demand up to £28,000.

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