Adding heat batteries to the Boiler Upgrade Scheme
Every home needs a low carbon heating solution that allows them to switch away from fossil fuels and inflexible direct electric heating. Where a customer is unable to afford or faces technical hurdles to install a heat pump, alternative clean heat solutions are necessary. Thermal Storage UK recommends that the Boiler Upgrade Scheme (BUS) focuses on electrifying home heating with products that are either highly efficient - like heat pumps - or highly flexible - like heat batteries - in their consumption of electricity. This ensures the best use of finite government funding, makes the best use of renewable energy, minimises the operating costs of clean heating technologies and minimises the impact of electrifying heat on the grid. Organisations such as the Energy Systems Catapult, Energy UK and the Centre for Net Zero supported the addition of heat batteries to the BUS.
We agree with the UK government that super-efficient heat pumps should be the default way of electrifying heat. While it is technically possible to install a heat pump in most home archetypes, it is more challenging to install heat pumps in properties with limited external space or where significant radiator and pipework upgrades are required internally. Not all homeowners will accept the disruption or cost associated with this work. The government has previously estimated that more than 20% of homes could fall into this complex-to-decarbonise category. We need alternative low carbon solutions such as heat batteries for these customers.
In the Thermal Storage UK response to the government’s recent consultation on the BUS, we recommend adding heat batteries for central heating as an eligible technology. Heat batteries for central heating are highly flexible so can make the most of renewable electricity and significantly reduce the carbon produced by home heating. When paired with a smart time-of-use tariff, heat batteries for central heating can ensure that energy bills for heating are roughly the same as when using a gas boiler.
We recommended that technologies are only eligible for taxpayer-funded grants if they (a) are covered by the MCS and (b) have independently verified in-home data from projects such as the Homes for Net Zero trial. This ensures that policy is based on real world evidence and consumers are protected.
We recommend that the grant for heat batteries for central heating is set at £5,000 per install, with heat batteries added as an Energy-Saving Material eligible for zero-rated VAT. This grant level reflects three considerations:
Any government grants for clean heating technologies should be set at a sufficient level to broadly reach parity with a gas boiler installation. A gas boiler installation typically costs between £2,000 and £5,000. A grant of £5,000, with zero-rated VAT, would leave the homeowner paying roughly the same for a new gas boiler and a typical installation of a heat battery for central heating.
Innovative UK manufacturers have significantly developed heat batteries for central heating over recent years, establishing new ways of storing heat and integrating with dynamic time-of-use tariffs. We expect to see reductions in manufacturing and installation costs as volumes increase.
The proposed £5,000 grant level is lower than the £7,500 provided to hydronic heat pumps (air-source and ground-source), providing a signal to people that there is a hierarchy of support for clean heat technologies and that they should first explore installing a heat pump.
We look forward to the UK government setting out its Warm Homes Plan by October 2025, including any support with the capital costs associated with installing heat batteries for central heating.