Heat Pump Installers Warn on Grant Cuts

UK heat pump installers expect the government to reduce funding for the boiler upgrade scheme in Wednesday's budget. The move threatens a sector that relies heavily on state subsidies to offset installation costs for homeowners.

Bill Tuck, operations director at Sustain Homes in Watford, stated that approximately 75% of his customers use government grants to purchase their systems. He described the subsidy as the foundation of the business. Tuck said, "If that’s to go, it’s extremely damaging."

The boiler upgrade scheme was introduced in 2022. It provides upfront grants of up to £9,000 to help property owners replace fossil fuel and direct electric heating with low-carbon alternatives. The Department for Energy Security and Net Zero has labeled the 2020s a critical decade for decarbonizing heat.

Despite this policy stance, industry figures argue the government is shifting the financial burden to consumers. Heat in buildings accounts for nearly one-fifth of the UK's greenhouse gas emissions. The country currently lags behind European peers in adoption rates.

Norway, the global leader in heat pump installation, has 632 units for every 1,000 households. The UK has only 3.5 per 1,000 households. This gap highlights the scale of the challenge facing domestic installers.

Jim Lacey, who runs JLN Plumbing & Heating, noted that the economic argument for heat pumps depends on subsidy support. He said, "No one’s going to save the planet if it really hits their pocket."

Lacey explained that installers previously told customers that while heat pumps cost a few hundred pounds more than standard boilers, the long-term energy savings justified the expense. He stated that this argument has disappeared as subsidy expectations fade.

Adam Killa, founder of Ask Renewables in Burscough, Lancashire, cited the 2022 closure of the Renewable Heat Incentive as a warning. When that scheme ended, his weekly installation count dropped from six to eight down to zero.

Killa said customers often questioned the value of a £15,000 system when a new boiler cost £3,000. Installers also warn that apprenticeship programs are at risk. Tuck said a lack of new entrants would lead to a shortage of installers and repair engineers.

The Heat Pump Association reported that about one-third of heat pumps sold in the UK in 2024 were produced domestically. Lacey argued that cutting subsidies would impact manufacturers and associated trades, not just installers. He described the supply chain effects as catastrophic for the industry's progress.

Economist James Meadway, co-director of Verdant, said removing funding from green jobs would hinder the government's reindustrialization goals. He noted that the climate strategy was working against other economic priorities.

Lacey said he expected the grant to be phased out gradually as production costs fell. He called a sudden cut to the boiler upgrade scheme catastrophic for the work completed so far. A government spokesperson said it does not comment on budget speculation but remains committed to lowering household bills and investing in clean energy.