Grants worth up to £9,000 underpin installer sales, apprenticeships and domestic production
UK heat pump installers fear possible government subsidy cuts ahead of Wednesday’s budget, with businesses saying grants support sales, apprenticeships and domestic production. A government spokesperson said the government does not comment on budget speculation and remains committed to lowering bills and investing in clean, homegrown energy.
Despite a surge in interest in cheap and sustainable ways to warm homes, The Guardian reported that the government was understood to be reducing the amount of money available to subsidize heat pumps as it looks for ways to cut spending in Wednesday’s budget. The reported reduction remained unconfirmed, and a government spokesperson declined to comment on budget speculation.
The Boiler Upgrade Scheme was introduced in 2022 to help decarbonize homes and businesses. It provides property owners with upfront grants worth up to £9,000 to replace fossil-fuel and direct electric heating systems with low-carbon alternatives, including heat pumps and biomass boilers.
Tuck, operations director at Sustain Homes in Watford, said the grants underpin a large share of the company’s work. “It’s going to damage us as a company,” Tuck said. “It’s the foundation of the business. If that’s to go, it’s extremely damaging.” About 75% of his customers pay for their heat pumps using government subsidies. Tuck said: “Of course, we will do what it takes to keep everybody’s jobs going and the business afloat. But it’s a tough one – I don’t know how we will do that.”
Tuck began installing air source heat pumps six years ago, when other heating engineers were skeptical about whether the technology would take off. “Now, the conversation is completely different,” he said. Tuck said: “I’m getting approached by them saying: ‘Mrs Jones, my customer for 15 years, she’s enquiring about a heat pump. What can you tell me?’ The whole narrative has changed.”
Jim Lacey, who has installed renewables with JLN Plumbing & Heating for 20 years, said lower energy costs are central to the sales pitch. “No one’s going to save the planet if it really hits their pocket,” Lacey said. He said a heat pump can cost a few hundred pounds more than a normal boiler while saving money on energy use. “That whole argument’s gone,” he said.
Adam Killa, founder of Ask Renewables in Burscough, Lancashire, described what happened after the 2022 closure of the Renewable Heat Incentive, a scheme that paid households for generating clean heat. “As soon as that stopped, we went from doing six, seven, eight [installs] a week down to zero,” Killa said.
Customers who contacted Killa after the incentive closed focused on the difference in upfront cost. “Well, I know they’re good, but 15 grand – I can buy a new boiler for three grand. What’s the point?” he said.
Heat in buildings accounts for nearly a fifth of the UK’s greenhouse gas emissions, according to government data. The Department for Energy Security and Net Zero described the 2020s as a “critical decade for decarbonising heat.” Against that backdrop, The Guardian reported that the government appeared to be putting the cost of decarbonising heat on the consumer.
The UK also trails other European countries in heat pump installations. Norway, the global leader, has 632 heat pumps installed for every 1,000 households, while the UK has 3.5.
The government continues a drive to increase the number of young people earning while learning, but installers say subsidy cuts would put apprentices and the industry’s future at risk. “Unless we start bringing the young generation through, we’re going to have a huge lack of installers, repair engineers, and more importantly, heat pumps as well,” Tuck said.
The industry is nascent, and installers fear heat pump manufacturers will go under. According to the Heat Pump Association, about a third of heat pumps sold in the UK in 2024 were produced domestically. Lacey said the consequences would extend beyond installation to delivery, manufacturing and associated trades.
“This isn’t just down to us fitting the heat pumps, it’s the people delivering them, it’s the people manufacturing them, it’s all the associated trades that go with it that make the little bits, the little bobs, everything,” Lacey said. “There’s so many knock-on effects.”
James Meadway, an economist and co-director of the green thinktank Verdant, said removing money from green jobs and manufacturing would damage Andy Burnham’s mission to effectively reindustrialise Britain. “It’s at a point where his blank spot on climate is working hard against other things he wants to do,” Meadway said.
Lacey said he had not expected the grant to last forever. He had expected business and consumers to be weaned off gradually as the technology became more widespread and production costs fell. “But to suddenly axe some off the BUS grant or get rid of it completely is just catastrophic for all the work that we’ve put in so far,” he said.
A government spokesperson said: “We do not comment on budget speculation.” The spokesperson added: “We remain committed to bringing down bills for families now, while investing in the clean, homegrown energy and warmer homes that will protect households from volatile fossil fuel prices for good.”