Ofgem published its eighth quarterly report on the Boiler Upgrade Scheme on 31 May 2024, covering the period from 1 February to 30 April 2024. The scheme, which runs under the Boiler Upgrade Scheme (England and Wales) Regulations 2022, opened on 23 May 20221.
The grant for heat pumps rose from £5,000 to £7,500 on 23 October 20231. In the quarter from February to April 2024, Ofgem received 6,835 voucher applications, issued 5,529 vouchers and recorded a value of £41,390,000 on those issued vouchers1. In the same quarter, installers submitted 4,500 redemption applications, 4,634 grants were paid, and grant payments totalled £34,697,0001.
Since launch, the scheme has received 40,259 voucher applications and issued 28,054 vouchers, worth £170,186,500. Redemption applications total 25,795, with 25,108 grants paid at a value of £148,180,5001.
Ofgem's figures show the grant uplift changed the pattern of applications and redemptions. It said: "Following the grant uplift, we saw significantly increased application volumes between Nov 2023 and Jan 2024. As vouchers for air source heat pumps (ASHP) and biomass boilers are valid for three months, unredeemed vouchers from this period are now expiring." It added that this correlates to around 10% of ASHP and biomass boiler vouchers expiring, in line with previous quarters1.
Of the 25,108 grants paid to date, 24,169, or 96.3%, were for air source heat pumps. Ground source heat pumps accounted for 701 grants, biomass boilers 219, and shared ground loop ground source heat pumps 191. By region, the South East had the most grants paid at 4,885, or 19.5%, followed by the South West at 4,725, or 18.8%, and the East of England at 3,342, or 13.3%. The North East had the fewest at 676, or 2.7%1.
On the heating systems replaced, Ofgem's figures record oil for 5,027 grants, direct electric for 2,392, coal for 284, other for 299, and no previous system for 4,4421.
Budget allocation is based on vouchers issued at stage one. Between launch and the end of Year 1 on 31 March 2023, £50,074,000 was allocated from the original £150 million Year 1 budget. From the £150 million Year 2 budget, running 1 April 2023 to 31 March 2024, £88,781,500 was allocated. For Year 3, from 1 April 2024 to 31 March 2025, the budget is again £150 million, and as of 30 April 2024 £38,263,500 had been allocated, leaving £111,736,500 available1. Ofgem notes that unspent budget is not carried over to the next scheme year1.
Separate figures published by the Department for Energy Security and Net Zero and cited by ScottishPower and Panasonic put applications in January 2024 at over 2,000, an increase of nearly 39% compared with the same period the previous year, describing the grant rise as a 50% increase in funding2. Alto Energy, citing government figures, said applications tripled in the week after the grant increased to £7,5003. Ofgem's quarterly report does not give a January 2024 monthly figure or a week by week comparison1.
Why it matters for households
The grant level is the main lever the scheme offers a household replacing a fossil fuel heating system, and the report shows the £7,500 rate changed behaviour: applications rose sharply after October 20231. The grant amount is fixed per installation, and Ofgem's data shows the great majority of paid grants went to air source heat pumps, the technology most commonly fitted1.
The report also shows the limits of a voucher. A voucher is issued at stage one and the grant is only paid after an installation is commissioned and the redemption application is checked at stage two1. Vouchers for air source heat pumps and biomass boilers last three months, and around 10% of those issued in the November 2023 to January 2024 period expired unredeemed1. For a household, that means the grant is not secured until the work is finished and the paperwork cleared.
The budget position matters for timing. Year 3 has £150 million, with £111,736,500 unallocated as of 30 April 2024, and unspent money does not roll into the following year1. The scheme statistics show how quickly that budget is drawn down.
What happens next
Ofgem publishes a monthly update on applications, vouchers issued, redemption applications, grants paid and remaining budget, and a more detailed annual report by 31 July each year1. The next quarterly report will cover the period from 1 May to 31 July 20241.
Sources3 cited
- Quarterly Report – Issue 8, ofgem.gov.uk
- ScottishPower and Panasonic deliver joint approach to provide greener, warmer homes at less cost for GB homeowners, aircon.panasonic.eu
- Are You Interested In Installing Air Source Heat Pumps In 2024?, altoenergy.co.uk