The House of Lords Environment and Climate Change Committee has described the Boiler Upgrade Scheme (BUS) as "seriously failing" in a letter issued on 22 February 2023, following its 2022 inquiry into the scheme1. The letter, written by committee chair Baroness Parminter, sets out barriers it says are holding back household take-up1.
The Boiler Upgrade Scheme offers grants to consumers in England and Wales towards air and ground source heat pumps or biomass boilers replacing fossil fuel heating1. The grant amount is £5,000 for an air source heat pump or £6,000 for a ground source heat pump1. The total cost of installation is generally between £7,000 and £14,000, according to the inquiry's findings1. Applications must go through an installer accredited by the Microgeneration Certification Scheme, and a home must have a valid Energy Performance Certificate issued in the past 10 years with no outstanding recommendations for loft or cavity wall insulation1.
The committee's concerns include that low-income households are locked out by high costs even after the grant is subtracted, that there are very few certified heat pump installers compared with gas boiler fitters, that a lack of consumer advice leaves people unfamiliar with the technology, that EPCs may disqualify households that should be eligible, and that manufacturers and installers are not expanding at the rate needed to meet the target of 600,000 installations a year1. In 2021, less than 2% of UK homes had low-carbon heating systems, and around 50,000 heat pumps were installed in the UK that year1. The letter also says the promise of hydrogen for home heating is misleading consumers told to expect "hydrogen-ready" boilers, despite hydrogen not being "a serious option in the short and medium term for home heating"1.
The Heat Pump Association welcomed the findings, saying its own submission helped inform several of the recommendations2.
"It is no secret that the Government's Boiler Upgrade Scheme (BUS) is stalling. The lack of an installer portal at launch and consumer awareness of the scheme has contributed to this."
The association said it was concerned that "at the current rate only a fraction of the budget will be deployed", and welcomed a call for this year's budget to be rolled into the next to compensate for the slow start2. It also backed directing funding to installer upskilling and training2.
Which? survey data show interest in heat pumps rising, though gas boilers remained the most considered option1:
| Year | Air source heat pump | Ground source heat pump | Gas boiler | Oil boiler |
|---|---|---|---|---|
| 2020 (7,500) | 9% | 6% | 73% | 10% |
| 2021 (8,001) | 10% | 7% | 66% | 7% |
| 2022 (9,722) | 17% | 11% | 62% | 6% |
Why it matters for households
The scheme's design shapes what a household can realistically do about its own heating. The eligibility rules tie a grant to the state of the home's EPC, so a property whose certificate recommends loft or cavity wall insulation is excluded until that work is addressed1. The committee's view that EPCs may be inaccurate means some homes could be shut out on paperwork rather than on the physical suitability of the property1. The gap between the £5,000 to £6,000 grant and a typical £7,000 to £14,000 installation cost is the difference a household has to find itself, and the committee says that gap is what locks out lower-income homes1. On running costs, the committee recommends better use of tariffs that suit low-carbon heating, such as time-of-use tariffs with lower off-peak prices1. Heat pumps can reach efficiencies exceeding 300%, against theoretical maximum efficiencies of just over 90% for A-rated gas boilers1. For a household weighing up BUS against ECO4, the two routes have different eligibility tests and funding sources.
What happens next
The letter recommends increasing grant levels, a renewed consumer campaign, better government advice tools, better local authority engagement, more encouragement for engineers to train or retrain as heat pump installers, and an update to EPC methodology to reward households that have switched to low-carbon heating1. The Heat Pump Association also calls for a firm date for the phase out of fossil fuel boilers2. No government response date has been reported.