Boiler Upgrade Scheme grants increased for oil and LPG users

In April, DENZ, announced a temporary increase in Boiler Upgrade Scheme funding to £9,000 for properties heated by oil and LPG in England and Wales.

The change, due this summer, brings the funding available into line with Scotland.

OFTEC responded positively to the announcement, but noted that even with this additional funding, oil-heated households will still face a significant financial shortfall. The Government’s own estimates suggest the switching cost at nearly £20,000 for larger off-grid homes.

The trade association also cautioned householders to think carefully before making the switch because Building Regulations prevent owners switching back to a boiler if the heat pump installation fails to perform as expected or results in high running costs in the long term.

Paul Rose, OFTEC CEO, explains: “Building Regulations in England prohibit installing a heating appliance with the potential to produce more CO2 than the appliance being replaced. That means if the heat pump turns out not to be suitable, households will not have an option to return to a boiler of any sort.

“However, most households either can’t afford the upfront cost of a heat pump, or are not ready to make the switch, but they shouldn’t have to stay on kerosene. The Government needs to support a wider range of low-carbon technologies, and renewable liquid fuels like HVO must be part of the mix. There is a clear public appetite for this approach, demonstrated by 16,000 oil-heated households responding to the Government’s recent consultation in support of these fuels. We now need to see a formal government response which incorporates these fuels into the wider decarbonisation strategy.”

Martyn Bridges, Director of External Affairs at Worcester Bosch, added: “We believe this is really good for a number of oil and LPG users in the UK.

“There are a few reasons why we’ve seen this announcement today. First, it is driven by the volatility of oil prices since the crisis in the Middle East, which has seen domestic heating oil prices double.

“Secondly, it is also likely down to the estimated underspend (as of 31 March) of the Boiler Upgrade Scheme (BUS) of around £65m, which signals that growth in retrofit heat pumps is starting to flatline and further action is required to make this government policy look like it’s succeeding.

“While finance is a big motivator, I think it’s not the only factor in people’s reluctance to change from a boiler system to a heat pump system. 

“There are many thousands of homes with an externally sited oil-fired combination boiler, and whilst a heat pump sits outside the property, the required hot water storage cylinder is mostly installed inside, where space is precious – meaning it’s not a good fit for households that simply don’t have the internal room to spare.”

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