Labour boost to the Boiler Upgrade Scheme - Yorkshire Heat Pumps

Following a few months of uncertainty as we waited to see how the new Labour government were going to support small-scale renewables, they have demonstrated their commitment this week to decarbonising heat in the UK. Good news for homeowners and installers alike!

While the Labour manifesto detailed their plans for Great British Energy, there was scant information on what the future would hold for small-scale renewables. After what has been a rather quiet few months for many installers while people were holding their breath and waiting to see what would come, we were delighted this week to see the government declare their support for the Boiler Upgrade Scheme (BUS) and make a commitment to relaxing planning regulations to drive the uptake of air source heat pumps.

Back in April 2024 Ofgem proudly announced a 93% year on year increase in applications to the Boiler Upgrade Scheme, with over 90% of those for air source heat pumps - the cheapest and easiest of the technologies to retrofit into existing homes. However, in the months that followed we any other installers like us experienced declining interest in heat pumps driven, we suspect, by uncertainty over a likely change of government and lack of clarity over their future vision for renewables on a domestic scale.  

Boost in BUS investment

Good news indeed then when they announced the injection of an additional £30m into the scheme this financial year and an almost doubling of the BUS budget for the year from April 2025 to £295m. While there has been no increase to the grant itself, which stands at £7,500 for an air source or ground source heat pump and £5,000 for a biomass boiler, this should stimulate interest once more as there is now certainty for the year ahead. 

Here at Yorkshire Heat Pumps we see this level of funding as a definite catalyst to the uptake of air source heat pumps, but it doesn't really touch the sides when it comes to installing a ground source heat pump system which requires significantly higher investment due to the groundworks involved. No wonder then that over 90% of BUS applications are for air source.

Planning reform

The other major annoucement this week related to the relaxing of planning regulations. Under current planning rules, a single air source heat pump can be installed under what is called Permitted Development, that is, without the need for Planning Permission, as long as certain conditions are met. One of these conditions being that the heat pump must be sited over 1m from the property's boundary. This impacts smaller, particularly urban properties including terraced houses, where homeowners would struggle to site a heat pump over 1m from the neighbouring property.

Early next year this condition will be removed making it easier for such properties to install a heat pump. However, if the property is listed or in a conservation area or where two or more heat pumps are needed, Planning Permission will still be required.

Future developments

As part of its Clean Heat strategy, the government has announced a consultation on the energy efficiency standards for gas boilers and heat pumps with the aim of reducing operating costs, and a consultation on minimum energy efficiency standards for rental properties which could bring further good news for homeowners and renters. But there has been no announcement about an outright ban on gas boilers, which had been planned under the previous government, so Labour appear to be adopting a carrot rather than a stick approach to the move to clean heat.