Businesses that install renewable heating systems in the UK are fearing the worst as the government is understood to be slashing the amount of money available to subsidise heat pumps in Wednesday’s budget. Bill Tuck, operations director at Sustain Homes in Watford, said: “It’s going to damage us as a company.” About 75% of his customers pay for their pump using government subsidies. “It’s the foundation of the business. If that’s to go, it’s extremely damaging,” he said. This was reported by Qazaqyia.kz citing The Guardian.
Background and importance of subsidies
The boiler upgrade scheme (BUS) was introduced in 2022 to help people decarbonise their homes and businesses. It provides upfront grants worth up to £9,000 to help property owners replace fossil fuel and direct electric heating systems with low-carbon alternatives such as heat pumps and biomass boilers.
Heat in buildings is responsible for approximately nearly a fifth of the UK’s greenhouse gas emissions, the latest government data shows. The Department for Energy Security and Net Zero has described the 2020s as a “critical decade for decarbonising heat”, but now appears to be putting the cost of decarbonising on to the consumer. The UK lags far behind other European countries with heat pump installation; Norway, the global leader, has 632 installed for every 1,000 households, while the UK has a paltry 3.5.
‘No one saves the planet if it hits their pocket’
Jim Lacey, who has been installing renewables with his business JLN Plumbing & Heating for 20 years, said: “No one’s going to save the planet if it really hits their pocket.” “We can go in [to homes] now and go: ‘It’s a few hundred pound more than having a normal boiler, but you save so much on your energy usage.’ That whole argument’s gone.” He said that while he had not thought the grant would last for ever, he had expected business and consumers to be weaned off gradually as the technology became more widespread and production costs fell. “But to suddenly axe some off the BUS grant or get rid of it completely is just catastrophic for all the work that we’ve put in so far,” he said.
Adam Killa, the founder of Ask Renewables in Burscough, Lancashire, saw what happens when subsidies are removed after the 2022 closure of the Renewable Heat Incentive, a scheme that paid households for generating clean heat. “As soon as that stopped, we went from doing six, seven, eight [installs] a week down to zero. The customers say: ‘Well, I know they’re good, but 15 grand – I can buy a new boiler for three grand. What’s the point?’”
Threat to apprentices and manufacturing
While the government continues its drive to increase numbers of young people earning while learning, heat pump installers say cuts to the subsidy will put their apprentices – and the future of the industry – at risk. “Unless we start bringing the young generation through, we’re going to have a huge lack of installers, repair engineers, and more importantly, heat pumps as well,” said Tuck.
A nascent industry, installers fear manufacturers will go under too. According to the Heat Pump Association, about a third of heat pumps sold in the UK in 2024 were produced domestically. “This isn’t just down to us fitting the heat pumps, it’s the people delivering them, it’s the people manufacturing them, it’s all the associated trades that go with it that make the little bits, the little bobs, everything,” said Lacey. “There’s so many knock-on effects.”
Economist’s view and government response
James Meadway, an economist and co-director of the green thinktank Verdant, said removing money from green jobs and manufacturing would damage Andy Burnham’s mission to effectively reindustrialise Britain. “It’s at a point where his blank spot on climate is working hard against other things he wants to do,” he said.
A government spokesperson said: “We do not comment on budget speculation. We remain committed to bringing down bills for families now, while investing in the clean, homegrown energy and warmer homes that will protect households from volatile fossil fuel prices for good.”