Missing the target

From Climate Scepticism

BY MARK HODGSON

In a comment on A Heated Debate I drew attention to a Guardian article which told us this:

The government is increasing its air source heat pump grants for homeowners in England and Wales by 50% to £7,500 from Monday amid criticism about slow adoption of the low-carbon technology.

The £2,500 in extra support – on top of £5,000 offered – aims to take the cost of installing an air source heat pump below that of the average gas boiler.

Support for installing ground source heat pumps – which are not suitable for most homes in the UK as they require access to a large outdoor space – will increase from £6,000 to £7,500…

…But the government’s stated ambition for 600,000 heat pumps to be installed every year by 2028 has struggled to find public support due to the high upfront costs of installations and a lack of clear information.

The NIC said last week that the current rate of heat pump installation is “not cutting the mustard” and the scheme’s funding needs to increase if more households are to benefit. The scheme’s current budget is underspent, according to PA, as households balk at the cost and complexity of switching.

That was more than three months ago, and so when I saw “Boiler Upgrade Scheme statistics: December 2023” on the Government website I thought I would take a look to see if the additional grants have had the effect of increasing uptake towards the Government’s target of 600,000 heat pump installations per annum. The short answer is “no”.

The statistics relate to the government’s Boiler Upgrade Scheme (“BUS”) which “aims to incentivise and increase the deployment of low carbon heating technologies by providing an upfront capital grant towards the cost of an installation of an air source heat pump (ASHP), a ground source heat pump (GSHP) and, in limited circumstances, a biomass boiler”. To that end “grants available were £5,000 for an ASHP or biomass boiler, and £6,000 for a GSHP. From 23 October 2023, grant levels for the installation of ASHPs and GSHPs increased to £7,500. Grants for biomass boilers remain at £5,000.” The initial grant pool of £450 million until 2025 has been added to by a further £1.5 billion until 2028. It seems that the powers-that-be have recognised that they were failing to achieve the level of uptake they wanted, and that the absurd costs of heat pumps might have at least something to do with that, so they went and threw a bucket load of (our) money at it.

It’s early days, but it doesn’t seem to have worked with a rightly sceptical public. There was a bit of an uptick in October, though not at the levels that the Government might have hoped for, then interest fell off in November, and again in December. The Government valiantly attempts to spin its failure thus:

New figures show applications to the government’s Boiler Upgrade Scheme in December jumped by 49% compared to the same month in 2022.

Well, yes and no. It really is the most disingenuous (I’m tempted to say dishonest) piece of spin. For some reason the number of voucher applications received in December 2022 (924) was the lowest monthly total since the commencement of the scheme in May 2022. Otherwise the number of applications has generally been between 1,200 and 1,500 per month. In October 2023, possibly with the increased subsidy level coming into effect, the number of monthly applications jumped to 3,355, but in November it fell to 2,557, and in December it collapsed to just 1,378, which is very roughly the average level of applications before the increased grant level was announced. It’s too early to say whether there will be increased interest, or whether the British public will remain as indifferent to the grant scheme as they have been to date. However, to spin a second huge huge monthly fall in applications as a “jump” of 49% (by reference to the lowest figure in the database, which, conveniently, was twelve months earlier) strikes me as disgraceful. “Trust me, I’m from the Government”. I don’t think so.

Remember that the Government’s target is 600,000 heat pump installations per annum. Well, in the 20 months of the scheme from May 2022 to December 2023 (inclusive), they received the grand total of 31,378 voucher applications. In other words, fewer than 20,000 per annum on average. I’d say they have some way to go, and if the steep decline in applications from October to December 2023 is anything to go by, the target is going to be missed quite spectacularly.

This is extraordinary given the tsunami of heat pump propaganda with which we are being inundated, and the increased size of the grants being provided at the taxpayers’ expense. It seems the British public aren’t remotely interested, no doubt because they are happy with their gas boilers, can’t afford to change to heat pumps (even with the assistance of a substantial grant), and don’t want the massive level of disruption that installing a heat pump often entails.

A quick look at the costs might be revealing. According to the Government statistics, the median cost of installations in the fourth quarter of 2024 is as follows:

Air source heat pumps: £13,582.

Ground source heat pumps: £25,367.

Biomass boilers: £15,227.

Of those, only the cost of biomass boilers seems to be falling (from a high of £18,000 in the second quarter of 2023 – though the cost was £15,000 in the fourth quarter of 2022).

Air source heat pumps have seen costs rise steadily from a low of £12,861 in the third quarter of 2022.

Ground source heat pumps have also seen a steady rise in costs, from a low of £23,000 in the second quarter of 2023.

Postscript

If, like me, you think the number of voucher applications received after twenty months is risible, the figures relating to redemptions during that period are even worse, working out at fewer than 1,000 per month on average. 19,839 redemption applications have been received, and 19,064 of them have so far been paid.

I think it’s fair to say that it isn’t exactly going to plan.