Home Money Heat pump grants extended to more homes as ‘boiler tax’ pushed back: How it works and who can use it

Heat pump grants extended to more homes as ‘boiler tax’ pushed back: How it works and who can use it

by Elijah
0 comment
Big fan: More households can now get discounts on heat pumps under expanded government scheme

More homes are now eligible for grants of up to £7,500 to install new heat pumps, as the Government expands the Boiler Improvement Scheme.

Heat pumps collect heat from air, ground or water and can replace traditional ways of heating homes using fossil fuels, reducing energy bills in the process.

But the devices cost between £8,000 and £30,000 to buy and install, and the wide price range reflects what type you buy and what type of home you have.

Here’s everything you need to know about the changes to heat pump and boiler taxes.

Big fan: More households can now get discounts on heat pumps under expanded government scheme

Big fan: More households can now get discounts on heat pumps under expanded government scheme

How has the Boiler Improvement Plan been expanded?

To encourage homeowners to make the switch, the Government is offering Boiler Improvement Scheme grants of up to £7,500 for air source and geothermal heat pumps and up to £5,000 to install a biomass boiler.

But now the Government has extended the Boiler Improvement Scheme to make them cheaper to install and has also boosted the “boiler tax” on new gas boilers until 2025.

The current Boiler Improvement Scheme requires homes to be adequately insulated to access the grant money.

That can mean installing expensive insulation in cavity walls or lofts, with bills of up to £2,500.

The Government now plans to remove this requirement, meaning it will be easier and cheaper to access grants for heat pumps under the scheme.

Which boilers qualify for the upgrade plan?

Air and ground heat pumps have always been eligible for grants under the boiler improvement scheme. Now, biomass boilers with built-in cooking will soon be able to get them too.

At the moment, biomass boilers can access the regime, but not those with cooking functions.

The Government will now add biomass boilers/stoves to the scheme, and homeowners can get grants of up to £5,000 to install them.

Of course, they must be in homes outside the gas network, in a rural area and have an emissions certificate that proves that they are minimally polluting.

When will these changes come?

The Government has not set a date, but plans to change the rules in 2024.

Can I get higher subsidies if I live off the gas network?

Perhaps it will be possible in the future according to the plans that the Government is considering.

Currently, many homes that are not connected to the gas network heat their homes with smokeless fuels, diesel and LPG.

The cost of replacing these systems with heat pumps can be much higher than for more modern homes.

There is currently no change to the Boiler Improvement Scheme grants to reflect this.

But the Government has now said it will consider it, but has not said when.

A government statement said: ‘Off-grid properties tend to fall into the category of being larger, “complex to decarbonise” and/or self-contained and therefore have a higher heat demand requiring a larger and more expensive system.

‘In addition, we recognize that costs can sometimes be higher when replacing high carbon fuels such as coal, oil and LPG compared to gas boilers, affecting the costs of rural properties compared with the urban ones.

“We therefore intend to introduce new specific differentiated categories in the regulations for off-grid gas properties and the substitution of specific fuel types such as coal, oil and LPG.”

Rejected: The government said it would fine boiler and heat pump manufacturers from April 2024 if they did not install enough heat pumps, but that will now not happen until April 2025.

Rejected: The government said it would fine boiler and heat pump manufacturers from April 2024 if they did not install enough heat pumps, but that will now not happen until April 2025.

Rejected: The government said it would fine boiler and heat pump manufacturers from April 2024 if they did not install enough heat pumps, but that will now not happen until April 2025.

Can I use the Boiler Improvement Plan in a new build home?

Not yet, but maybe it will be possible from 2025.

The current Boiler Improvement Scheme does not allow applications for new build homes, unless the property is self-built.

The Government’s reasoning is that property developers should foot the bill for installing heat pumps.

But now the Government has said it could take steps to allow newly built homes to access cash to install heat pumps.

A Government statement said it would “introduce a distinct category in the regulations for eligible new builds, with the option to reduce or remove support under (the Boiler Upgrade Scheme).”

This will take place from 2025, when the Government will introduce its Future Homes Standard.

This will require low carbon heating to be installed in all new build properties.

When does the Boiler Improvement Plan end?

Currently, the plan will end in 2028.

It was initially scheduled to end in 2025, but the Government extended it in 2023.

What is the boiler tax?

In January, the Government announced it would fine boiler and heat pump manufacturers from April 2024 if they did not install enough heat pumps.

These manufacturers warned that they would likely not meet these targets and would have to pass these costs on to consumers in the form of higher boiler costs.

Boiler manufacturers such as Baxi, Ideal, Worcester Bosch and Vaillant have said they will have to pass the cost of these fines on to consumers in the form of higher prices for boiler installations.

Vaillant said the price of its boilers would increase by £95, Ideal prices by £110 and the cost of Baxi and Worcester Bosch boilers by £120.

When will the boiler tax start?

The Government is now delaying the ‘boiler tax’ of up to £120 for homes having new boilers installed until April 1, 2025.

Some links in this article may be affiliate links. If you click on them, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

You may also like