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The Boiler Upgrade Scheme is failing to deliver, says Lords committee

22 February 2023

The Lords Environment and Climate Change Committee has concluded from its inquiry into the Government’s Boiler Upgrade Scheme that the scheme is failing to deliver on its objectives, following a disappointingly low take-up of grants.

In a letter sent to Lord Callanan, Parliamentary under Secretary of State for Energy Security and Net Zero today (Wednesday 22 February), the Committee warns that if the current take-up rate continues, only half of the allocated budget will be used to help households switch to low-carbon heating systems and a healthy market of installers and manufacturers will not be in place in time to implement low-carbon heating policy measures smoothly. Therefore, the Government’s 2028 target of 600,000 installations per year is very unlikely to be met.

Key findings

The Committee has found:

  • public awareness of low-carbon heating systems is very limited, and promotion of the BUS has been inadequate
  • there is a shortage of heat-pump installers & insufficient independent advice for homeowners
  • Hydrogen is not a serious option for home heating for the short to medium-term and misleading messages, including from the Government, are negatively affecting take-up of established low-carbon home heating technologies like heat pumps
  • upfront costs are too high for many households, even with the help of the grant, making it impossible for low-income households to benefit from the scheme
  • while heat pump running costs are becoming competitive with gas boilers in some modelling, progress is urgently needed through electricity market reform to ensure running costs are affordable.

Committee's recommendations

The Committee is calling on the Government to:

  • provide greater clarity to industry and consumers on feasible options for low-carbon home heating through a consistent policy framework, public communications, and householder advice
  • roll over the remainder of the BUS first year budget into the second year and establish a review to consider extending the scheme
  • correct the Energy Performance Certificates (EPC) methodology so that certificates properly reward households for making the switch to low-carbon heating and flawed EPC recommendations cease being a barrier to BUS eligibility
  • upgrade the provision of Government advice, alongside recognising the role of independent retrofit coordinators, to help households navigate low-carbon heating installations
  • relax the requirement arising from Permitted Development Rights to site a heat pump a certain distance from neighbouring properties.

Chair's comments

Baroness Parminter, Chair of the Environment and Climate Change Committee, said:

“The transition to low-carbon heat is fundamental in the path to net zero, given that 17% of the UK’s greenhouse gas emissions come from our homes.

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.”

Further information