Britain prepares to cut heat pump subsidies — The Guardian

In the United Kingdom, ministers are preparing to reduce funding for subsidies for heat pump installations in order to find money to increase defence spending. According to The Guardian, this concerns the Boiler Upgrade Scheme for England and Wales, which helps households replace gas boilers with electric heat pumps.

Energy Minister Miatta Fahnbulleh has been tasked with finding more than £2 billion in savings in the department’s budget. This is intended to help fund the defence investment plan agreed by the previous government.

Cuts worth hundreds of millions

According to the publication’s sources, the programme is not planned to be cancelled entirely, but hundreds of millions could be cut from its £2.7 billion budget. The basic grant for installing an electric heat pump is £7,500, while for some homes not connected to the gas grid, support can reach £9,000.

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Since the programme began in 2022, nearly 80,000 heat pumps have been installed with its support. At the same time, Treasury officials have long believed that the subsidies are used mainly by middle-class households. Supporters of the programme say that more than 40% of the funds went to families with annual incomes below £52,000.

Industry reaction

Representatives of the energy sector and climate organisations warned that the cuts could harm the development of the British heat pump market. According to programme supporters, the sector is growing by more than 25% annually, although France sold four times more heat pumps than the United Kingdom last year.

The Department for Energy Security and Net Zero said that savings for the defence investment plan represent a small part of the department’s overall budget, which increased after the government spending review. It said details of funding for national security investments would be presented in the autumn.