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UK unveils GBP5,000/household low-carbon heat system fund

Highlights

Aimed at making heat pumps affordable

Hydrogen heat decision due in 2026

Proposal to move levies off power bills

UK households will be able to apply for GBP5,000 ($6,868) grants under a GBP450 million Boiler Upgrade Scheme to help install low-carbon heating systems, the Department for Business, Energy and Industrial Strategy said late Oct. 18.

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Under a new government target, all new heating systems installed in UK homes by 2035 are to use low-carbon technologies like electric heat pumps, or support new technologies like hydrogen-ready boilers.

The new grants, part of GBP3.9 billion of funding to decarbonize heat and buildings, are designed to make electric heat pumps no more expensive to buy and run than gas boilers, BEIS said.

The strategy "sets out how we are taking 'no-regrets' action now, particularly on heat pumps, while supporting ongoing trials and other research and innovation on our future heating systems, including on hydrogen," BEIS said.

The government would make a decision on a potential role for hydrogen in heating buildings by 2026, the ministry said.

Heat pumps, meanwhile, would play a key role "in all scenarios, so for those who want to install them now, we are supporting them to do so", with grants available from April, 2022. The fund is to run for three years.

"No-one will be forced to remove their existing fossil fuel boilers, with this transition of the next 14 years seeing the UK's households gradually move away from fossil fuel boilers in an affordable, practical and fair way, enabling homeowners to easily make these green choices when the time comes to replace their old boiler," BEIS said.

The government would also seek to reduce the price of electricity over the next decade by shifting levies away from electricity bills, the ministry said.

A call for evidence on this proposal was expected to be published with decisions made in 2022, it said.