Households pushed to scrap gas boilers with £5,000 grant

New gas boilers will be banned from 2035 and families are set to be offered £5,000 grants to buy heat pumps for their homes under a landmark green strategy to be unveiled next week.

The Prime Minister will announce the “boiler upgrade scheme” as the centrepiece of his long-awaited Heat and Buildings Strategy.

It will set a deadline to prohibit the installation of new gas boilers and instead encourage homeowners to switch to low-carbon alternatives before then.

Boris Johnson will first hold a Cabinet “away day” in the South West on Friday to discuss the green agenda with his top team before making his announcement next week, possibly as early as Monday.

He will also publish his net zero strategy, which will run to more than 100 pages, at the same time. It will set out a roadmap to achieving net zero emissions by 2050, covering green investment and jobs, as well as the shift to cleaner forms of transport, such as electric vehicles.

Mr Johnson’s plan for boilers will seek to reassure both hard-up families and sceptical Tory MPs that “no one will be forced to remove their working existing boilers” at any point, as the future ban applies only to new installations, and that “the move to low-carbon options will be gradual”.

How heat pumps work

How Heat Pump Works

However, it will offer homeowners who choose to switch early a £5,000 “boiler upgrade grant”, The Telegraph understands. The scheme is likely to provoke criticism because heat pumps currently cost £10,000 and concerns have arisen over whether the technology warms homes to a sufficient degree and whether it works appropriately in draughty older houses and some flats.

A funding pot worth hundreds of millions of pounds has been agreed between Kwasi Kwarteng, the Business Secretary, and Rishi Sunak, the Chancellor, to pay for the boiler upgrade grant, it is understood.

The scheme is an expansion of an existing £4,000 state subsidy called the “clean heat grant”. A wider range of households will be eligible for the renamed, more generous “boiler upgrade grant”.

Ministers will also vow to work with industry to halve the cost of heat pumps by 2025, an aim a sceptical Whitehall source on Thursday night warned could be overly “ambitious”, although Octopus Energy has said it believes the target can be met.

At present, heat pumps far outstrip the price of gas boilers, which cost between £1,500 to £3,500.

The running costs of the two heating systems are currently similar due to the artificially high price of electricity. But over the next decade, green levies imposed on electricity bills are set to be shifted to gas bills under plans to be approved by ministers.

Hydrogen production

The move, which will record household gas bills even higher, is likely to spark a backlash at a time when wholesale global gas prices are soaring, having more than quadrupled in the past year.

The Government will use its Heat and Buildings Strategy to formally set out for the first time its ambition to end the installation of new gas boilers by 2035, although legislation will not be brought forward at this stage to ban them from that date.

It is hoped that hydrogen and heat network systems will become more widespread, as well as electric heat pumps.

The 2035 ban on new gas boilers aims to bolster Mr Johnson’s green credentials as he prepares to host world leaders at the Cop26 climate change summit in Glasgow, which starts at the end of this month.

It is also designed to send a signal to the market that demand for heat pumps is set to soar in the hope of boosting competition, driving down prices and improving the technology.

Boris Johnson is likely to announce the plans for the Heat and Buildings Strategy next week, possibly as early as Monday

Credit: AP Photo/Jon Super

Green plans gather steam ahead of Cop26

The Prime Minister returns from holiday to meet with his Cabinet on Friday for a special regional session on the green agenda ahead of the Global Investment Summit next Tuesday.

They are expected to discuss UK climate leadership ahead of Cop26, as well as the opportunities of the upcoming net zero strategy for boosting jobs and investment.

On Thursday night, the Department for International Trade announced that Britain has attracted almost £6 billion of green investment since Mr Johnson launched his 10-point plan to “build back better and greener” last November.

This includes Nissan’s £1 billion investment into a flagship electric vehicle hub in partnership with Sunderland City Council, and more than £650 million channelled into offshore wind this year, supporting about 3,600 jobs across the Humber and North East.

It is estimated that the 10-point plan will underscore the security and creation of 56,000 “high-quality green” jobs over the next decade.

The Prime Minister said: “These new figures are yet more evidence that going green means creating high quality jobs across the United Kingdom. We are at the forefront of seizing these new opportunities, supported by major government investment and a British zeal for innovation and commerce.”

Ministers hope to attract more cash for clean technologies at the Global Investment Summit in London on Tuesday, which is set to attract 200 leading industry figures.

Lord Goldsmith of Richmond Park said it was ‘amazing how wrong’ the Government had been in its ‘massively pessimistic’ estimates of the cost of switching to greener technologies

Credit: Eddie Mulholland for The Telegraph

Government ‘underestimated’ net zero transition

On Thursday, an environment minister insisted that continuing to invest in fossil fuel industries would be like “pouring public money into keeping fax machines going at a time when people use emails”.

Lord Goldsmith of Richmond Park said it was “amazing how wrong” the Government had been in its “massively pessimistic” estimates of the cost of transitioning to greener technologies.

He cited offshore and onshore wind power, solar power, electric vehicles and batteries as areas in which the cost had plunged far faster than anticipated.

Downing Street believes that the UK’s exposure to volatile global gas prices in recent weeks underscores the need for the nation to move away from fossil fuels to protect consumers in the long term.

A government spokesman said: “We want to encourage people to take up more efficient technologies such as heat pumps and electric vehicles by removing levies on electricity over time, working with industry to drive down costs of technologies and ensure they are as affordable as current options.”

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