From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
h/t Ian Magness/Paul Kolk
Anyone for free money? Yes, as the Prime Minister discovered when he was offering to pay for our pub lunch under the Eat Out to Help Out scheme. But his marketing genius seems to have deserted him when it comes to the seemingly more generous offer of thousands of pounds for a heat pump.
Even with an increase in the grant from £5,000 to £7,500 per installation, the Boiler Upgrade Scheme has failed to capture the imagination of the British public. In the first two years of the scheme only £127 million out of a possible £300 million of grants have been taken up. Between May 2022, when the subsidies were introduced, and December last year just 18,900 heat pumps were installed – compared with 1.5 million new gas boilers.
And no, it isn’t because the gas boiler industry has poisoned our minds with anti-heat pump propaganda, as the green lobby would have it. Rather it comes down to basic economics. A £7,500 grant doesn’t seem such a good deal when it comes in the form of a discount on something which remains fantastically expensive even after the grant is taken into account.
The justification for subsidising heat pumps was supposed to be that it would allow the industry to reach a larger scale and thus bring down costs. But that doesn’t seem to be happening. I first obtained a quote for a heat pump for my home in 2010, when it was going to cost £10,000. True, some things come down in price when they move from being a niche product to a mass market one, but it is foolish to assume that all new technologies will go this way.
Moreover, with heat pumps there is the added problem of their questionable effectiveness in older properties. Some people seem to like them, while others have splashed out many thousands still find themselves shivering in a lukewarm home.
So what exactly is the incentive for homeowners to rip out a gas boiler and replace it with a heat pump? One of the reasons you might do it is that you are concerned about climate change and want to make your own personal gesture. Is that what taxpayers are subsidising: middle class guilt? Paying £7,500 a time to help quite well off people feel better about themselves.
At least Rishi Sunak’s subsidised pub lunches ended after a month. At some point he and his colleagues are going to have to ask themselves: how much longer are we prepared to sink public money into propping up an industry whose products show little sign of being able to achieve mass appeal on their own merits?
