NFB backs expansion of heat pump scheme following report on retrofit costs
The National Federation of Builders (NFB) has responded to a new report examining the cost of retrofitting heat pumps in the UK, arguing that expanding support for air-to-air systems is key to improving affordability and accelerating the transition away from fossil fuel heating.
The report, published by the Energy and Utilities Alliance (EUA), found that around nine in 10 retrofitted heat pumps are currently supported by taxpayer-funded grants, with subsidies estimated to total around £500 million.
It also concluded that heat pumps installed during 2025/26 will deliver carbon savings at an estimated cost of £437 per tonne of carbon, significantly above the Government’s own valuation, raising questions over the value for money of the current approach.
NFB highlights role of air-to-air heat pumps
The NFB said the Government’s decision to include air-to-air heat pumps within the Boiler Upgrade Scheme (BUS) was an important step towards lowering installation costs and widening consumer choice.
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Richard Beresford, chief executive of the NFB, said: “Fossil fuel heating is on the way out, therefore the Government needed to facilitate a transition to electric heating and hot water, and heat pumps are an obvious solution. However, because the previous government ignored the most popular global heat pump system, air to air, criticisms that taxpayer funds could be better used are fair.
“Thankfully, the Labour government heard our recommendations to include air to air heat pumps in the Boiler Upgrade Scheme (BUS) and the data shows that this cheaper, more efficient system is already seeing grant applications.”
Calls for further changes to Clean Heat Market Mechanism
The NFB said the Boiler Upgrade Scheme had helped establish the heat pump market but argued further policy changes are needed to improve competition and encourage wider adoption.
Rico Wojtulewicz, director of policy and market insight at the NFB, said: “The heat pump industry is a cottage one, therefore the sector needed pump priming and the Boiler Upgrade Scheme (BUS) has done that. However, it is right to point out that four years on and the cost of installations remains broadly the same and rose when the grant was increased from £5,000 to £7,500.
“The inclusion of air-to-air heat pumps was an important step, not just because they are cheaper and supported by a large installer base – but because it opens the door for complementary solutions, for example, meeting hot water needs met via thermal batteries. This better understanding of decarbonisation in practice will have a knock on to other regulations, for example energy efficiency, renewables and overheating, plus support innovation.
“In our view, the next step is for the Government to makes changes to the Clean Heat Market Mechanism (CCMM), so that fossil fuel boiler manufacturers can meet the requirement to sell X number of ASHPs via the currently excluded air to air systems.”
The EUA report examines the costs associated with retrofitting heat pumps into existing homes and assesses the effectiveness of current Government subsidy schemes as the UK continues its transition towards low-carbon heating.
