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UK heat-pump subsidy has minimal impact on gas use

  • Märkte: Natural gas
  • 09.11.26

The UK government's Boiler Upgrade Scheme (BUS) has had a negligible impact on the country's gas demand so far, Argus calculates, but a surge in voucher applications suggests heat pump installations could rise in the coming months.

The BUS could remove gas consumption equivalent to 433GWh in a single year, as of September (see table). The estimate uses voucher redemption data for installations replacing gas across regions and median gas consumption by household in May 2024-May 2025, in line with the latest data from the Department of Energy Security and Net Zero (Desnz). Gas consumption from domestic meters was 281TWh on May 2024-May 2025.

But a large share of gas boiler replacements is likely to take place in older buildings, which tend to consume more gas because of inefficient heating systems and poor insulation. This could therefore have increased the reduction in UK gas demand resulting from gas boiler replacements.

The latest voucher application data suggest heat-pump adoption could accelerate in the near term. The total number of applications soared to 9,738 in September, the highest for any month since the scheme started, from 7,486 in August and 4,089 in September last year. The number of vouchers issued and redeemed has also started to increase (see graph).

Annual gas demand could fall by a further 191 GWh/yr, if all vouchers issued in the past four months translate into installations and 59pc of these replace gas — in line with the latest financial-year average. This assumes median consumption from May 2024-May 2025.

The scheme incentivises the replacement of gas boilers with heat pumps by giving grants of up to £7,500. But not all voucher applications will lead to a voucher being issued, as some will be rejected if they do not pass energy regulator Ofgem's eligibility checks. Likewise, not all issued vouchers will subsequently be redeemed. Reasons may include the property owner changing their mind about the installation or the voucher expiring before the work is complete.

The scheme is in its fifth year, with a budget of £400mn for the financial year 2026-27, and funding confirmed up to 2029-30 through the Warm Homes Plan. Over £560mn has been paid out through grants across the first four years of the scheme.

The implementation of the Warm Homes Plan could accelerate with the establishment of the Warm Homes Agency, as announced by the government last week as part of its Energy Independence Bill. The new agency aims to improve consumer awareness and advice to accelerate the uptake of schemes.

Estimated gas demand reduction from BUS
RegionVouchers redeemed for gas-displacing technologiesMedian demand per meter (kWh)Estimated demand reduction (GWh/yr)
North East1,52710,32515.8
North West4,2129,77741.2
Yorkshire and The Humber4,67910,19247.7
East Midlands4,64410,12447.0
West Midlands3,15810,15732.1
East5,4479,98254.4
London3,8049,99038.0
South East9,60410,00796.1
South West5,5818,48747.4
Wales1,4399,32713.4
Total433.0

BUS vouchers received, issued and redeemed

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