Generous grants do little to curb climbing costs – and allow installers to cash in.

The cost of fitting a heat pump has risen by a third in six years despite generous government grants – leading critics to accuse installers of profiteering.

Ministers want 600,000 heat pumps fitted each year by 2028 and hoped to cut the real term costs of installing one by 25pc compared to 2021. The Telegraph has the story.

But the price of fitting an air-source heat pump actually increased by 33pc, from £9,686 to £12,951 in the six years to January 2025, according to Telegraph analysis of data from the trade standards body, MCS.

This is despite the fact the Government has since introduced grants worth up to £7,500 for each household – which were paid directly to installers.

Industry experts blamed a host of factors for the spike such as the rising cost of copper and energy, while a government spokesman said the figures did not account for inflation. But even after factoring in inflation, the cost of installing a heat pump has still risen £700 – despite promises from successive governments it would fall in real terms.

It has led critics to accuse installers of cashing in on the grants which allowed them to pass more costs on to consumers.

Dramatic charts show that between March and April 2022, the same month the first Government grant was introduced, the cost of installing a heat pump suddenly rose by 25pc to £1,465 per kW. It meant a 4kW heat pump cost almost £6,000 while a large 15kW device was upwards of £21,000.

MCS claimed this jump was due to a difference in sample size, as well as the end of the renewable heating incentive – the precursor to the grant.

Mike Foster, of the Energy Utilities Alliance trade body, told The Telegraph: “When subsidies increase, we always see sales volumes follow, that’s just basic economics. But it is also likely that price competition is less keen and as a result average costs drift upwards. That’s just basic human nature.

“Given it is larger companies primarily benefitting from the Boiler Upgrade Scheme, having a dedicated workforce fitting large numbers of heat pumps, we should see average costs of installations falling – indeed that is what the Government predicted would happen – it’s called the ‘learning curve’.

“But the data suggests this is not happening anywhere near fast enough. Either the learning curve isn’t working for heat pump installations, which would be unusual, or companies are taking higher profit margins on each job. Both require closer examination by Ministers.”

Successive governments have desperately tried to entice households into switching to a heat pump by making them cheaper.

In November, ministers announced that a planned clean heat market mechanism – which would see manufacturers fined for not selling enough heat pumps – was to be drastically scaled back.

Read the full story here.