Britain's flagship heat-pump scheme has been branded an “embarrassment” after badly missing its target of 30,000 annual installations and spending just 40% of its budget.

Fewer than 10,000 heat pumps were installed in the first year of the grant programme, which gives households money to pay for them as part of net zero efforts to wean Britain off gas.

Mike Foster is chief executive of the Energy and Utilities Alliance trade body, which represents boiler manufacturers.

He told the Telegraph: “It takes a certain type of genius to fail to give away £150million of taxpayers’ money and this wretched scheme looks like it has done just that.

“When will the government actually listen to the people - the majority of whom simply cannot afford a heat pump, subsidised or not?

“The scheme is simply a taxpayer handout to those who don’t need it. It does little for carbon saving compared to investment on insulation. It does not help people keep bills low. It takes from the poor to give to the wealthy and it is an embarrassment of a policy.”

Demand increases

But Rebecca Dibb-Simkin, product chief at Octopus Energy, which makes and installs heat pumps, insisted that demand had increased “tenfold” since the end of 2022.

She added: “Uptake of schemes like this often starts slow and picks up over time as teething issues get fixed. EPC requirements and planning rules created a bottleneck for heat pumps in the UK.

“But this is changing rapidly as we’re building the systems to deal with these constraints, and Octopus is investing heavily in this area to further speed up the rollout.

“Smart technologies like heat pumps, which turn 1KW of electricity into 3KW of heat, are key to unlocking a cheap green energy system, and grants like the Boiler Upgrade Scheme help kickstart this.”

The boiler upgrade scheme was launched in May 2022 and allows households to claim a £5,000 voucher, which can be put towards the cost of replacing a gas-powered boiler with an electrically-powered heat pump.

In the first year, it was given a budget of £150million - enough to help pay for about 30,000 heat pumps.

Budget unused

But, as of March 31, just 9,981 vouchers had been redeemed, leaving £89.7million of the annual budget unused, according to official figures published by regulator Ofgem.

A further 2,015 vouchers, worth £10.1million, have been issued but not redeemed.

The figures raise further question marks over the government’s target for 600,000 heat pumps to be installed per year by 2028, which is already in doubt.

Tory MP Craig Mackinlay, chairman of the Net Zero Scrutiny Group, said: “Even when the very wealthiest are being bribed by the government to buy heat pumps, they are refusing to do so.

“Perhaps it would be wise for ministers to take a step back and ask why this is the case.

“A sensible approach to net zero involves allowing competition to provide green products that people actually want to buy because they work, rather than forcing upon them poor products that don’t.”

Too expensive

Critics of heat pumps say the devices remain far too expensive for most households and that installing them will require costly adaptations in many homes.

The Energy Saving Trust estimates that a typical household will end up paying between £7,000 and £13,000 for an air source heat pump, before any voucher discount is applied.

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