Government unlocks £15m heat pump funding

The government has unlocked £15m in funding in a bid to drive innovation and make heat pump systems cheaper and easier to install.The funding is part of the government’s £60m Heat Pump Ready programme, which seeks to deliver innovative solutions for reducing barriers to the rollout of low carbon technology in homes and businesses across the UK.A total of 24 projects in England and Scotland have won funding in the second round of the Heat Pump Ready programme.The funding comes alongside the government’s £450m Boiler Upgrade Scheme, which provides £5,000 grants to homeowners toward the cost of a heat pump and a zero rate of VAT for installing clean heating measures.Business and Energy minister Lord Callanan said: “In light of rising global gas and oil prices, getting low-carbon heating technology into homes is a priority for this government as it will help households ditch the costly fossil fuels that are driving up bills.“Heat pumps are a proven, reliable technology that uses cheaper renewable energy produced in the UK.“We are already bringing costs down through the Boiler Upgrade Scheme and slashing VAT to zero, but by finding innovative ways to make them even cheaper and easier to install, we will help more homes see the benefits even quicker.”The key objectives of Heat Pump Ready are to reduce costs and increase the performance of domestic heat pumps, minimise disruption in homes during the process of heat pump installation, and develop financial models that support an increase in heat-pump deployment.The government says innovation support is one part of its strategy to help bring low-carbon heating technology to the mass-market.The government has a target of installing 600,000 heat pumps a year by 2028.Industry estimates that the UK heat pump market grew nearly 50% in 2021.The government says the £15m ‘stream 2’ funding will support 37 small and medium enterprises across 24 projects in England and Scotland, support the creation of more than 300 jobs, and leverage £6.5m of private investment.Stream 2 of the Heat Pump Ready programme comes alongside streams 1 and 3.Stream 1 is providing over £2m of funding across 11 projects developing feasibility studies for innovative ways to increase the deployment of domestic heat pumps within their local area.In their applications for Phase 1, project teams have estimated a potential cost reduction of at least 20% could be achieved through coordinated deployment.Heat Pump Ready is part of the £1bn Net Zero Innovation Portfolio (NZIP) and funding was announced in October 2021, alongside the Heat and Building Strategy.As a result of the strategy and with help from projects receiving funding through the Heat Pump Ready programme, the government says it is confident that, as the market for low carbon heating grows, the cost of technology will fall “rapidly”.Working with industry, the government is aiming for heat pumps to cost the same as fossil-fuel boilers to buy and run by 2030 at the latest, with big reductions of at least 25-50% by 2025.Read next: How Liz Truss and her misguided priorities are failing our sectorAre you a social housing professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.