Posted by: @etchedpixels

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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 plug in solar

Agree but... we have to accept that many will go bust because that was always their business plan, just as it was with solar.  Their plan was always to harvest the free money then disappear avoiding tax and liability without any care for customers.

Posted by: @editor

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.

I think there are two important questions to attempt to answer in any response:

1. Why the BUS grant should not be cut?

Aside from the many and varied problems with the industry, the actual grant itself would appear to be working, it is encouraging the installation of heat pumps, and reducing CO2 emissions.

Up to March 2025, the BUS awarded £328.2 million in grants and supported 49,136 installations. Compared to a budget of £450 million, supporting up to 90,000 installations. The shortfall was mainly due to weaker early demand. Despite the shortfall in the number of installations, the grant is working well with respect to the primary goal of reducing CO2 emissions 2.5 MtCO2e compared to 2.6 estimated in the impact assessment. Hence CO2 emission savings are almost on target, while the spend is lower than was anticipated to achieve that result. That is a success story and good evidence that the grant is a good use of public money. It is achieving what it set out to do and should be continued.

2. If Treasury budget cuts mean that the funding available for BUS grants must be reduced, how should the scheme be modified to best operate with that smaller funding pot?

The economically optimal level of a subsidy such as the BUS grant is such that the number taking it up exactly uses up all of the funding pot available. Increasing the grant above this level would stimulate more demand, but fewer heat pumps would be installed as the funding pot would run out at a smaller number of grants. Decreasing the grant below the optimal level would result in lower demand and hence fewer heat pumps installed, leaving money in the funding pot. It would appear that a £5000 grant was below the optimum an take up was weak in the early stages of the BUS grant, whereas £7500 may now be quite close to the optimal level.

If the funding pot is cut, then there would be an economic argument to try and do the most good with what funding remains by reducing the BUS grant to a level where there would be just enough take up to use up what funding is available. It is not easy to estimate this. Unfortunately the researchers responsible for the Govt report missed the opportunity to ask that crucial question of households taking up the grant - what level of grant would have been just sufficient to persuade you to go ahead?

As an alternative, or in addition to reducing the value of the grant, it could potentially be better targeted. Currently only about half of the self-builds receiving the grant would not fit a heat pump if the grant were not available, compared to around 3 in 4 for retrofits. This suggests that the grant is achieving considerably better value for public money on retrofits. One way of addressing this would be a lower level of grant for self-builds. Another option would be to consider the amounts paid for replacing gas and oil boilers, and direct electrical heating. Replacing the latter results in lower electricity demand, but a much smaller reduction in CO2 emissions than is the case with fossil fuel boiler replacement. Based on CO2 emissions reduction, there is an argument for a lower level of grant for replacing direct electric heating. The replacement of direct electric heating with a heat pump also brings a much larger reduction in running costs, so perhaps less subsidy is needed to make a heat pump an economically viable upgrade in that case.

Finally, there is A2A and A2A combined with HW heating, should the BUS grant be technology agnostic in terms of the type of heat pump used providing a uniform level of grant for any technology that can do the job of decarbonising the heating system?

In terms of making good use of a reduced funding pot, the BUS grant could also be tapered down over time. Ideally, this would reflect reducing installation costs and improvements in running costs with respect to gas (a closing of the spark gap). It is not clear that either of these are currently happening in a systematic / planned way. Rather the spark gap is hostage to the wholesale gas price and international events.  

This is going to be interesting.

https://renewableheatinghub.co.uk/octopus-wants-to-turn-your-heat-pump-into-air-conditioning/

@editor Well done Octopus for devising a possible solution with reduced outlay to enjoy ‘Air Conditioning’ or more accurately ‘Cooling’; I couldn’t decide from the article whether the Cooler becomes a permanent item in the room or whether they will be using some form of ‘snap-on / off’ connection to connect the plumbing up. Even if removable during the winter months, there is still the matter of storage for the unit(s). A system to cool say three rooms is still going to be a sizeable investment isn’t it? The £500 - £600, will this include installation I wonder? Regards, Toodles.

The price point is comparable to that of higher end portable units. I had a quick look at Amazon's choice 12000 BTU portable AC units and found one for £600 that is 72 x 37 x 44cm and 29.5kg, which is almost identical size and weight to the Octopus Cosy Cooler.

I wonder if it will have a catch tank for condensate that the user has to empty or be plumbed in with a condensate pipe through the wall.

If Octopus are targeting a better alternative to good quality portable AC units, then snap-on/off connections as @toodles suggests would be a good idea, and a catch tank so no holes need to be drilled in the wall.

Posted by: @rob-of-york

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and a catch tank so no holes need to be drilled in the wall

Given the present low levels in our South West reservoirs, I think we'd run the condensate pipe into a jug and drink it.

Posted by: @rob-of-york

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The price point is comparable to that of higher end portable units. I had a quick look at Amazon's choice 12000 BTU portable AC units and found one for £600 that is 72 x 37 x 44cm and 29.5kg, which is almost identical size and weight to the Octopus Cosy Cooler.

I wonder if it will have a catch tank for condensate that the user has to empty or be plumbed in with a condensate pipe through the wall.

If Octopus are targeting a better alternative to good quality portable AC units, then snap-on/off connections as @toodles suggests would be a good idea, and a catch tank so no holes need to be drilled in the wall.

I imagine it will have a catch tank otherwise it becomes a fixed appliance.  Quatt do something possibly similar here  

I can definitely see that there is a market, although what I personally want is a wall mounted unit that also heats (ideally without running the unit's internal heat pump when in heating mode).  Then it could just replace an ordinary radiator rather than being abother thing to store for most of the year.  They are sort of done, but sold as 'water loop airconditioners' for the office market, at about £3K plus per pop, designed for a slightly different purpose.  Still one step at a time!

We have an electriQ EcoSilent portable air conditioner, and while it’s reasonably effective at keeping a room cool, dealing with the condensate is a pain in the backside. The exhaust hose is an even bigger nuisance... finding a practical way to vent all that hot air outside without leaving a window open or compromising the seal is far more hassle than it should be. Not a great design, and most portable units are designed that way. That's why the Octopus approach is interesting, potentially eliminating two of the biggest frustrations of conventional portable air conditioning.

I wonder how long it will be for someone to release a more generic variation of this that can work with pretty much any heat pump. Or for Octopus to offer a way for the cooler to plug into non-Cosy systems.

The underlying idea is old as the hills. They have been used forever in some applications. Folks like Parkair and Broughton sell them.Putting them on the heatpump circuit as they seem to be proposing though is a very clever spin on an old idea.

I would be interested to see the results of this Octopus system and efficiency, the system needs to run 2 compressors to produce the same value of cooling as they will not be connected refrigerant circuits, Panasonic have a system that does exactly this, I tried to convince a couple of customers that really wanted both heating and cooling but were unwilling to pay the uplift of £500 per room for the FCU's.

This version may work as an add on as customers have already committed and had the cosy installed so whats another £600 if it will work but when you factor in £14,000 for the A2W ASHP and say 4 rooms at £600 for the add ons as a solution all in one go its not so cheap, £16,400, you could probably install AC everywhere for that and not have 2 compressors running.

Seems good as an add on to me but not a solution, that said I will wait to see if the indoor units are below 38db or the same as a window rattler or mobile and to be fair, not many people want 4 mobile units rattling away all day, it why split win even though they are more expensive.

With regards to the BUS grant raid, I gave it more thought!

Reduce the BUS to £5,000 and allow 4% government backed loans for a 7yr period (length of most ASHP warranties) levied against the borrower cost for 10k could be around £137 per month and the 15k installation can go ahead, savings per year could be around £200-£300 per year given the way gas, oil and LPG are going so this would probably cover some or most of the interest and apparently getting your home Eco add value to the property "apparently"

To add on top, take another chunk of money from the pot for the military but find a way to either permineantly take the VAT off of heating power and reduce the heating power only, something like a yearly rebait like reading your meter to get the solar feed in tariff but the heating usage instead. This would work well form 2027- ish as all electric heating systems are supposed to start to be fitted with an accurate usage measuring device connected to MIR for the SSES Framework. 

Lastly, all the low income houses should register their interest and be covered by Government funding via local authorities through a register of small audited specialist contractors (not multi nationals or management firms to be re-subcontracted over and over) each year the fund should cover XXX installations and each year this pot replenished, each installation should be checked by the council, tested over that year and if the success rates are say 90% that contractor / specialist gets another 10 and then another 10, this is scalable as i am sure many of us would be happy to do 10 installations between our 20-100 of our own per year.

Just my thoughts as a solution rather than always doom and gloom. I cannot think of another way to scale it down without effecting the market negatively.