@editor 

CCS is surely the one not delivering and that should obvs be cut, not ASHP.. 

@editor Do you think it will be for the better or we will see the collapse of the ASHP industry as we know it, think about the amount of money and time gone into all of this and now imagine, I assume they will scrap the penalty that boiler manufacturers get for not selling enough ASHP's if they are going to remove commitments intended to support the start of the market.

My view is they should not be allowed to cut it off in 1 hit but I would support a reduction at 20% per year for the next 5 years, if they cut it off in 1 month they may end up paying some of that money in social welfare support payments to people loosing their jobs. I also think it would make multiple engineers retire early or pull away from the industry all together considering how volatile it has become with compliance.

Compliance:- no grant no need for MCS going forward, no need to commission, no need to have anything checked other than CPS and also it will make them cheaper by a mile but you will get cheaper corner cut installations. Perhaps this Zero disrupt model is in good time, every job now will end up as a boiler swap and the client told change your own rads, we did not allow for that.

Lastly and probably the best thing, if this happens A2A will be the better option all day long, the UK will be the next Spain for split bashing, a lot of houses will have boxes heating half the house and keep the boilers for dead of winter, the result will be no gas removal just less dependance, a lot of people have been asking for this model, its not right but might not be wrong either but it misses the Governments point all together, removing gas was the goal.

Perhaps they will keep the government back loan part, that may work or put more into that as it does not actually use much of the money, as its paid back it can support the next loan going forward and so on?

I have more to say but I want to keep within the rules and not be political which is hard to do here as this is a politicly motivated decision to scrap a promiss to an industry that spent a long time and a lot of money to get here.

In the end we AAC Group will be fine as we are 90% AC and commercial and thats only going to grow over the next decade but if enough changes around the domestic ASHP industry then it will loose us from the domestic market which might be a shame and I don't doubt countless other very good installers will follow and that's no great in a market where there are not so many great installers.  

I think the goal is reducing CO2 emissions, rather than removing gas boilers per se - that's a mechanism that is being used as a pathway towards the goal. One of my bug bears is when Govt. effectively mandates a specific technology and subsidies that rather than setting a goal in terms of what actually matters (CO2 reduction in this case) and then provide subsidies in a technology agnostic way to support that goal, thus letting industry and technological development find the most cost effective solutions.

Arguably in the short to medium term, much bigger reductions in CO2 could be achieved via the rapid and widespread adoption of A2A to run alongside gas heating in millions of homes on the basis of being both lower cost and zero carbon emissions. No extra incentive would be needed to get people to make use of A2A for heating other than looking at their own bank balances. A SCOP of 5 and half price electricity on a heat pump tariff results in a large proportion of heating costs at around 30-40% the price of gas. Of course there is also the added bonus of cooling and dehumidifying in summer. Take up could be very fast compared to A2W, since single-split A2A installs can easily be done in a day, and the level of disruption is absolutely minimal, far less than A2W "zero-disrupt". Unfortunately, there seems to be a lot of misunderstanding of A2A in the mainstream media with ideological resistance on the grounds that it uses additional energy in summer, forgetting that excess Solar PV production negates that concern. The general public seem to have very little awareness of A2A other than thinking of it as Air-Conditioning rather than something that can also provide very efficient heating. Hopefully that will gradually change.

A million homes a year halving their CO2 emissions from heating via A2A, is ten times the reduction in CO2 emissions compared to 50,000 homes becoming zero emission on heating via A2W. It's a case of the perfect being the enemy of the good!

NESTA suggested a tapering of the BUS grant, to gradually phase it out over a period of years, hopefully that is what will be done otherwise the circa 1800 active installers registered under the Boiler Upgrade Scheme may well be in trouble. Perhaps they will pivot to A2A installs. After the heat waves this summer, there is so much demand for domestic A2A that installers are having to delay work because they simply cannot get the hardware and parts needed fast enough.

@rob-of-york Agreed, a hybrid approach has always been championed but never supported so far by the Gov. I also agree that the use of AC in the summer as well as heating in the winter is lower C02 emissions due to the vast saving on the C02 in the 1st place, that and if mixed with Solar it is a no brainer. 

Perhaps everyone can change to AC installs but not in a 2 week period if the grant is cancelled as of the 1st of January 2027 as you cannot get any equipment with the rate of demand now let alone if 1800 more adding to the installation network.

I suppose lets see what happens as we have been here a couple times before and the BUS was generally left alone. If we are this broke then I think the BUS going will be the least of our problems or at least only a problem for a few thousand companies, the bigger hit will be multiple other things cancelled and taxes being adjusted so maybe its inevitable that things will just get much harder for the next 15 years, after all no one said the good days were here to last. Either way best of luck to all those in the ASHP industry and any other areas effected over the next 5 years.

Posted by: @ashp-bobba

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Do you think it will be for the better or we will see the collapse of the ASHP industry as we know it,

Well that's the sort of radical thinking we need at the moment. 🙂 

Overall I think the heat-pump schemes are their own worst enemy. We all know of botched installations, and that makes householders reluctant to consider a heat pump for their own home.

Is this perhaps the moment to reduce the BUS grant to £5500, but allocate £500 of that to Local Planning Authorities to undertake Building Regs inspections? At least we could then trust the Part-L compliancy certificates which those LPAs are currently obliged to send out.

Posted by: @rob-of-york

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I think the goal is reducing CO2 emissions, rather than removing gas boilers per se - that's a mechanism that is being used as a pathway towards the goal. One of my bug bears is when Govt. effectively mandates a specific technology and subsidies that rather than setting a goal in terms of what actually matters (CO2 reduction in this case) and then provide subsidies in a technology agnostic way to support that goal, thus letting industry and technological development find the most cost effective solutions.

...

I agree, but with a caveat.

I remember some time ago watching a TED talk about strategic planning for reduction of carbon emissions and it suggested that if people can be encouraged onto one form of power (e.g. electricity) then it is possible to get far more leverage for savings at point of generation than if one has to juggle investment across multiple power sources. A hybrid approach will cut the home's CO2 emissions but may well adversely impact the government's options at a higher level. In practice, I suspect it's nowhere near as clear cut as that, but it's a point to consider nonetheless.

@majordennisbloodnok the argument you cite from that TED talk is one which will now be addressed by the groups who are being formed to create Regional Energy Strategic Plans. It is they who must decide forward strategies which best reflect the supply and demand portfolio in their geographical area.

This recognises that renewable generation isn't evenly spread. Local knowledge is required in order to create better ways to achieve the overall targets set by HMG in consultation with NESO.

Simply building a massive electricity Transmission Grid to transfer electricity anywhere in the country is unaffordable and shouldn't be necessary.

@ashp-bobba I don’t think it would kill the heat pump industry, but I do think abruptly removing support would cause a very substantial drop in domestic retrofit installations unless the price homeowners actually pay could be brought down considerably. There is a big difference between an industry surviving and the transition succeeding, and your point about AAC being able to concentrate on other work illustrates that rather well. The Guardian reports proposed cuts rather than outright abolition, so complete withdrawal is a separate scenario at this stage.

Speaking personally, I want to do the right thing for the planet, but that commitment doesn’t make the financial decision straightforward. Would we have fitted our first heat pump without financial support? No. Knowing what I know today, including how difficult it can be to establish whether the installer will genuinely deliver a decent install, would I spend £16,000 or £20,000 entirely from our own pocket? No. At £10,000, I’d consider it if I had convincing evidence that the work would be excellent and meaningful protection if it wasn’t... at £6-£8k, I’d be much more willing to proceed, but I would still be scrutinising the installer very carefully. 

And that’s the part I think the industry needs to understand. My hesitation isn’t about whether heat pumps work, because I know they do, but about whether I can justify paying that much while also carrying the risk of getting a poor installation. A lower price reduces the financial exposure, but it doesn’t remove the concern about workmanship, performance or aftercare. 

Your final point is probably the one that worries me most, because a business like yours could survive perfectly well while deciding domestic air-to-water installations are no longer worth the uncertainty. If other capable firms make the same decision, the market hasn’t collapsed in the obvious sense, but homeowners may have even fewer good people to choose from. That is why I wouldn’t automatically welcome a contraction as an opportunity for quality to improve because the people who leave won’t necessarily be the weakest installers, and those with strong skills and alternative markets may have the least reason to remain. Wanting quality to catch up with ambition is not the same thing as wanting a funding shock that makes competent businesses walk away.

So no, I don’t see this as the end of heat pumps, but I do see a real risk of a smaller domestic market in which the wealthier households continue, the more adaptable installers take their skills elsewhere and everyone remaining is under greater pressure to make the cheapest possible offer. That isn’t the outcome I want. Good installers need a viable business and homeowners need an affordable and dependable heating system.

Let's put this in perspective:

In June, DESNZ was 'requested' to make £2bn in savings in order to release funds for national defence plans.

DESNZ has now put forward the idea that they could reduce the BUS grant. It's uncertain whether that's where the £2bn would come from or whether the BUS cuts would be in addition.

The Warm Homes Plan for the next five years will cost £15bn (+ inflation?). That was a key strategy put in place by Rt Hon Ed Miliband MP, who is no longer the Secretary of State for ESNZ. I can't see Miatta Fahnbulleh MP being prepared to fight The Treasury to retain that policy in its entirety.

@ashp-bobba - having read the above, and seen what @editor has just written, do you think Mars and the Moderators here should approach the civil servant who oversees the Decarbonisation of Heat Initiative and put forward a recommendation for a way forward? We already know who is.

For the moment, let's assume that DESNZ is looking around for ideas and our correspondence would actually be noted!

@transparent, yes, I think we should make that approach, but I’d want us to go in with something more useful than either "please don’t cut the grant" or a long account of everything we think is wrong with the industry. We can challenge the proposed reductions while still being constructive about how the money is spent, and I don’t think supporting heat pump funding obliges us to defend every aspect of the present system.

The question I’d put at the centre of it is this: how do we reduce the cost of getting a good heating system without simply transferring more cost and risk to the homeowner? That gives us something concrete to work towards, because reducing public expenditure, reducing installation costs and improving affordability are three different things, even if they sometimes get presented as interchangeable. A smaller grant is a saving for government, but unless something else changes, it is an additional bill for the household rather than an improvement in how the work is delivered. I think that's the bit that's broken with the system.

Where I think RHH could contribute is by bringing the homeowner’s decision into the conversation alongside the installer’s economics. As I said in my earlier reply, my willingness to proceed isn’t determined solely by the price; it also depends on my confidence that the system will be designed properly and that somebody will take responsibility if it isn’t. I’d want our recommendation to recognise that reducing the risk of a bad purchase is part of encouraging adoption, not some separate consumer protection issue to be dealt with afterwards. Making a system slightly cheaper while leaving the homeowner less protected could (and probably will) be a very poor trade.

I’d suggest a short submission, perhaps two or three pages, drawing on the department’s own evaluation and a handful of carefully documented, anonymised examples from here. We should include successful installations as well as difficult ones, because understanding what made a project straightforward and dependable is just as useful as identifying what went wrong elsewhere. I’d also be explicit that forum cases illustrate problems and possible solutions rather than establish a national failure rate, which I think is a fair point.

The recommendations should be limited and practical too. I’d start with protecting homeowners and installers who have already committed to projects, making any transition predictable and examining which costs can genuinely be removed without weakening the finished installation. Clearer scopes of work, less repeated administration and better coordination are all worth examining, but I’d want installers to help us establish the likely savings rather than confidently inventing a figure (which happens a lot!). Proper design, commissioning and a workable route to getting faults corrected would remain a non-negotiable.

@ashp-bobba’s contribution would be particularly useful here, because we need to understand what would actually keep competent businesses working in domestic heating, rather than simply what would stop them going out of business. I think @aventus-eco would also have some useful insights. If a company can remain profitable by taking its skills elsewhere, a policy assessment focused only on business closures could miss the loss that homeowners experience. It's really tricky, so I’d want us to ask what makes domestic installations unnecessarily difficult to deliver and support, and which changes would make them worth continuing without squeezing out the time needed to do them properly.

So yes, let’s agree the central recommendations between us, invite input from the installers willing to contribute and make a focused approach. We don’t have to arrive pretending we’ve solved the entire funding problem, but we do need to offer something credible that helps distinguish a genuine improvement from a budget saving that merely leaves somebody else paying more.

Posted by: @editor

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A smaller grant is a saving for government, but unless something else changes, it is an additional bill for the household rather than an improvement in how the work is delivered. I think that's the bit that's broken with the system.

... which is why I've suggested that there be an inspection by a Building Regs surveyor, rather than the LPA simply accepting the self-certification route favoured by MCS.

From conversations with them, I realise the Building Regs officers quickly work out who are the reputable installers working in their area. They won't waste time inspecting all of those sites in person. Sometimes they ask to see a photo for example. They take the same approach with self-builders. Once they've seen how the foundations are laid they're very unlikely to offer a site-visit. No self-builder will want to breach the Approved Documents for their own house!

The upshot of the Part-L certificate being justly awarded is that consumer confidence in heat-pumps will rise. High COPs result in happy customers and lower bills.

The uptick in this approach for DESNZ is that more heat pumps will eventually be installed, and more of those will be operating satisfactorily. Not everything needs to be controlled by legislation. Happy consumers is a driving force that can achieve the same outcome.

We need more building inspectors anyway and less self-serving "professional" bodies that don't actual do any enforcement and spend their entire time trying to invent new qualifications to milk the actual workers and the customers. The state of the electrical industry being a fine example right now.

I have mixed feelings about the grant situation. If we can get loads of people mostly off gas with a 2.5 grand air/air heatpump then we shouldn't be handing our giant wodges of cash to give people fancy stuff, you want shiny you pay for it. Weird how I know so many 7.5 grand heatpump grant people trumpeting their dosh from the state whilst complaining that poor people have mobile phones.

That aside with my lobbying hat on

- There's no point getting into a debate about whether giving more money to the people who charge a million pounds for a cheap drone is a good idea because it's clearly a done deal

- There's limited opportunity to influence it in terms of removing the junk. Who cares if we lead in hydrogen if nobody has any use for it.

- There's no point starting from the small grant side. That's effectively surrendering and then trying to claim a few fields back on enemy terms.

Where I would go would be the risk aversity. Humphrey and all it's modern forms and capacity is really not much less risk averse IMHO than they were in the 1990s. 

The textbook "how to screw up the end of a grant scheme" was the FIT debacle that put loads of people out of work, deprived the government of tons of money and nearly destroyed the UK solar industry, leaving loads of half trained people who never got trained, customers with no panels or money, loads of tax payouts for unpaid wages, a ton of lost vat and owed tax, winding up orders and god knows what else.

Humphrey needs reminding about that, and the need to wind schemes down in a controlled and well flagged manner, so that people don't all go bust, customers don't all get half a heatpump, or nobody to fix it and investors don't run from the scene for years as they did with solar.

IMHO that's a much much more powerful message, and you can slow the process perhaps to the point if we are lucky that Russia finally implodes and Trump can't save his dear friend and military spending can go back to the normally obscene levels not even worse.