EUA questions value of taxpayers subsidising heat pumps

The Energy & Utilities Alliance (EUA) is questioning whether subsidising heat pump installations is the best use of taxpayer money given rising energy prices.

Current figures suggest the energy price cap will reach £3,300 by October 2022 and increase further to £4,200 in January 2023. Meanwhile, the latest Boiler Upgrade Scheme figures show that 2,000 heat pump installations received a £5,000 subsidy in July, costing the taxpayer £10 million.

Mike Foster, chief executive of trade body EUA, said the subsidy would be more effective if targeted towards energy efficiency measures in the home, reducing bills for Brits reportedly already an average £206 in debt on their energy bills.

Data from the Energy Saving Trust indicates £10 million could provide insulation for 19,000 lofts, potentially saving households £4.8 million a year on bills and reducing carbon emissions by 11,400 tonnes. If used to fit cavity wall insulation, 8,400 homes could benefit, saving £2.4 million a year on bills and reducing carbon emissions by 5,600 tonnes.

Mike said: “We are in the middle of a cost of living crisis. Is now the time for taxpayers to pay to fit a heat pump, when there are better ways of reducing bills for more people and cutting greater levels of carbon? When times are tough, there is even greater importance on government providing the best use of hard-earned taxpayers’ cash. It simply isn’t the time to give £5,000 cash handouts to those who can afford their energy bills, compared to helping the millions in dire need of support.

“We know Whitehall officials are worried [the scheme] is failing. The total scheme, over three years, amounts to £450 million subsidising 90,000 heat pumps. That same amount means nearly one million homes could get free insulation, cutting bills by nearly £220 million a year. Surely that’s the greater prize in these difficult times?”