Government simplifies Boiler Upgrade Scheme criteria and considers CHMM delay

The government is to simplify the eligibility criteria for the Boiler Upgrade Scheme, which provides grants of up to £7,500 to people in England and Wales to install low-carbon heating systems such as heat pumps.

The decision in its response to a consultation on the Boiler Upgrade Scheme, will see the removal of the requirement to have no outstanding recommendations for loft and cavity wall insulation  on a valid Energy Performance Certificate (EPC).

The government has also agreed to consider postponing the launch of the CHMM scheme to 1 April 2025. The Clean Heat Market Mechanism requires boiler manufacturers to sell a quota of heat pumps, starting with four for every 100 boilers they sell in the first year, rising to six for every 100 from 2025. If they can’t meet these quotas, they can buy credits from companies selling heat pumps, or pay a fine of £3,000 per missing heat pump. But the CHMM has proved highly controversial and has led to some boiler manufacturers raising prices to offset the costs.

Innovation charity Nesta has welcomed the changes to BUS eligibility criteria, which it called for in its consultation response, but cautioned that delays to the CHMM could lead to uncertainty in a key market for the UK economy.

Madeleine Gabriel, director of sustainable future at Nesta, said:

Heat pumps are the most efficient low carbon source of heating for people’s homes and the Boiler Upgrade Scheme is helping keep installation costs down for households. The strength of the scheme is that it is a straightforward offer with relatively few restrictions on eligibility. The Government’s announcement today removes further barriers to uptake meaning that even more homes will be eligible to use the grant to install a heat pump. This is good news – in fact, research we published today finds that it is all too easy for consumers to assume they won’t be eligible for this kind of Government scheme even when they are.

However, she expressed concern that more consideration of the CHMM and potential delays would give rise to uncertainty:

We are concerned that [it] sends the wrong signal to a key market for the future UK economy that needs stability to attract the right investment.

Nesta has published a report looking at how policymakers could improve current and future subsidy schemes that increase the number of households adopting low-carbon heating systems.

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