This insight is more than 2 years old
Heat & homes

Boiler Upgrade Scheme should maintain momentum for heat pumps

Date
June 17, 2025

Table Contents

At a glance

The Boiler Upgrade Scheme provides grants towards the capital cost of installing a low-carbon heating system and has supported 51,000 installations over the past three years – 97% of which are air source heat pumps.

The consultation proposes expanding the technologies that could be funded to include electric heating systems other than heat pumps, as well as heat pumps installed alongside conventional electric heating and air-to-air heat pumps.

In Regen’s response we argue that the scheme should retain its focus on accelerating the rollout of heat pumps and that including other technologies risks undermining certainty around the direction of travel, for both consumers and the supply chain.

Heat pumps promise lower energy use than other electric systems, yet deployment rates are held back by high upfront cost, which the scheme aims to overcome. Including other electric heating technologies that are already cheaper to install undermines this aim.  

Scaling up less-efficient electric heating at the cost of heat pump deployment would mean a higher-cost net zero energy network. Keeping the scheme focused on heat pumps underpins the messaging and clarity required to deliver the transition to clean heat.

Our consultation response makes the following recommendations:

  • The Boiler Upgrade Scheme (BUS) should not extend to include electric heating options other than heat pumps, maintaining clear support and messaging for the most efficient heating systems. Heat batteries, and similar technologies, may not represent a low regret option for government funding. Subsidising them now risks displacing heat pump installations.
  • Allowing the BUS to support direct electric heating alongside heat pumps risks increasing peak demand and externalising costs to the electricity network. BUS funding should be limited to where it promotes heat pump deployment and will have a limited impact on peak demand, e.g. direct electric hot water with storage, alongside air-to-air heat pumps.
  • Fossil fuel hybrid heat pumps should not be funded. These have higher emissions, higher cost and undermine the transition to clean heat by locking in dependence on the gas grid.  
  • The BUS is currently relatively simple in its structure and delivery. Adding additional technologies and constraints will add complexity in the administration and delivery of the scheme, which may undermine its success.
  • Air-to-air heat pumps should be permitted within the scheme, but must be funded in such a way to ensure they expand the decarbonisation of heat, rather than displacing hydronic heat pumps.
STAY INFORMED

The Dispatch

Sign up to receive our monthly newsletter containing industry insights, our latest research and upcoming events.

Submission successful
Thank you for signing up to The Dispatch.
There was an error submitting the form. Please check the highlighted fields in red.