UK Heat Pump Installers Fear Planned Subsidy Cuts in the Budget

Businesses that install heat pumps in Britain fear the worst as the government is understood to be slashing the money available to subsidise the low-carbon home heating systems in Wednesday's budget, as it looks for ways to cut spending.

The Boiler Upgrade Scheme (BUS), introduced in 2022, 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.

Bill Tuck, operations director at Sustain Homes in Watford, first started installing air source heat pumps six years ago, when other heating engineers were sceptical the green technology would take off. Now, he said, the conversation is completely different, and engineers approach him because their long-standing customers are enquiring about heat pumps.

About 75 percent of Tuck's customers pay for their pump using the government subsidies. It is the foundation of the business, he said, and if it goes, it will be extremely damaging to the company. The firm will do what it takes to keep everybody's jobs going and the business afloat, he said, though he does not know how.

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. The UK lags far behind other European countries on heat pump installation: Norway, the global leader, has 632 installed for every 1,000 households, while the UK has 3.5.

Jim Lacey, who has been installing renewables with his business JLN Plumbing & Heating for 20 years, said no one is going to save the planet if it really hits their pocket. Installers can now tell households a heat pump costs a few hundred pounds more than a normal boiler but saves so much on energy usage; if the subsidy goes, that whole argument is gone, he said.

Adam Killa, 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, his work went from six, seven or eight installs a week down to zero. Customers, he said, ask what the point is in spending 15 thousand pounds when a new boiler costs three thousand.

Installers say cuts to the subsidy will put their apprentices — and the future of the industry — at risk. Unless the young generation is brought through, Tuck said, there will be a huge lack of installers, repair engineers and heat pumps as well.

According to the Heat Pump Association, about a third of heat pumps sold in the UK in 2024 were produced domestically. Lacey said the impact is not just on those fitting the pumps; it reaches the people delivering them, the people manufacturing them and all the associated trades, with many knock-on effects.

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.

Lacey said he had not thought the grant would last for ever, and 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 of the BUS grant or get rid of it completely would be catastrophic for all the work put in so far, he said.

A government spokesperson said they do not comment on budget speculation. The spokesperson added that the government remains committed to bringing down bills for families now, while investing in clean, homegrown energy and warmer homes that will protect households from volatile fossil fuel prices for good.