BEIS gives £15m funding boost to heat pump innovators

Recipients of BEIS's previous round of funding proved that heat pump installation costs could be cut by 20%

The Department for Business, Energy and Industrial Strategy (BEIS) confirmed on Tuesday (27 September) that it has selected the winning projects for the latest round of its Heat Pump Ready funding programme.

The programme is backed by £60m in total, taken from the Department’s £1bn Net-Zero Innovation Programme pot that was launched late last year by then-Chancellor Rishi Sunak. BEIS hopes that the £60m will help to create more than 300 jobs in the heat pump manufacturing and installation sectors and related industries.

Projects supported by this latest round of funding under the programme are contributing to efforts to bring down heat pump costs, make them more efficient and minimize disruption in homes and other buildings during installation. The UK Government is aiming for heat pumps to cost the same as gas boilers to buy and run by 2030.

It is hoped that the projects will collectively be able to leverage £6.5m of additional private investment due to the Government’s financial support.

Among the projects set to receive a share of the funding is a collaboration between EDF, Daikin Airconditioning and the University of Sheffield to create and expand a digital platform providing customers with advise on selecting, installing and caring for heat pumps.

Other successful applicants include Energiesprong, which is aiming to develop a retrofit package including heat pumps; Green Energy Options, which is using AI to assist heat pump deployment, and Home Infrastructure Technology, which is developing a green loan to help homeowners fund heat pumps and other carbon-cutting measures.

“Heat pumps are a proven, reliable technology that uses cheaper renewable energy produced in the UK,” said Business and Energy Minister Lord Callanan. “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 Boiler Upgrade Scheme was announced last autumn as part of the Heat and Buildings Strategy. Backed with £450m of funding, it is providing grants of up to £5,000 to homeowners looking to replace a gas boiler with a new heat pump.

Many green groups had hoped for a longer-running scheme, given that there are 29 million domestic properties in the UK, and that the UK Government is targeting 600,000 heat pump installations nationally each year by 2028. Rising energy bills are prompting more homeowners to consider heat pumps, with one study from the Energy and Climate Intelligence Unit (ECIU) finding that one-third of UK homes are now considering making the switch. However, citizens’ groups have repeatedly warned that those able to choose a heat pump, even with Government support, are likely to be high earners.