More than £32.5 million worth of heat pump grants were issued between November 2023 and January 2024, almost triple the £11.7 million handed out during the previous quarter.
It means that just over £82 million worth of Boiler Upgrade Scheme (BUS) vouchers have been issued during the second year of the scheme so far. With the current budget due to expire at the end of March, almost £68 million remains unspent.
The figures come from Ofgem’s first quarterly report to be published since the government increased the maximum value of BUS vouchers from £5,000 to £7,500.
It has led to a surge in voucher applications, with 4,610 applications received and 4,417 paid during the latest quarter.
It represents a record number of applications received during any quarter since the scheme’s inception in May 2022 and is almost double the number of applications made during the previous three-month period.
The recent increase in heat pump applications is in stark contrast to the scheme’s previous record. At the end of the first round of the BUS (which ran from April 2022 to March 2023), £89.6 million of the £150 million budget went unspent and was clawed back by the Treasury.
In August last year, before prime minister Rishi Sunak increased the grant level, Utility Week analysis showed that uptake of BUS grants had again “hit a ceiling”.
However, following the increased grant rate Bean Beanland, director for growth & external affairs at the Heat Pump Federation, predicted that the annual BUS budget could be “blown” before the March deadline.
To cater for the increased application rate, the government announced a major uplift in the annual budget for future rounds of the BUS.
Between 2025/26 and 2027/28, a total of £1.54 billion has been allocated to the scheme, meaning more than £500 million will be available for heat pump grants each year.
The current annual budget – and next year’s budget – is set at £150 million.
Despite the scheme’s resurgence, fewer than a quarter of MPs believe that the UK will meet its target of installing 600,000 heat pumps a year by 2028, new polling shows.
The survey of 107 MPs by YouGov for the MCS Foundation shows that just 24% are confident that the government’s current package of policies is sufficient to meet the target set by Boris Johnson’s government in 2021.