Insulation No Longer Mandatory Requirement For The Boiler Upgrade Scheme But Is This Advisable?

The UK government introduced the Boiler Upgrade Scheme (BUS) in May 2022 to encourage more households to replace existing fossil-fuel heating systems with more efficient low-carbon heating systems such as air source heat pumps. The scheme offers homeowners a grant to help with the upfront costs of installing a heat pump or biomass boiler. Back in 2023, the grant was increased from £5,000 to £7,500 making it more affordable to switch from a fossil-fuel heating system to a low-carbon one. 

The Department for Energy Security and Net Zero (DESNZ) has now changed the Boiler Upgrade scheme (BUS) to make installing heat pumps even cheaper and easier. From the 8th of May this year, homeowners no longer need to install cavity walls or loft insulation to access the £7,500 grant. The requirement for a property to have no outstanding Energy Performance Certificate recommendations for loft and cavity wall insulation has been removed. Up until now, homeowners have often been forced to carry out insulation upgrades at further cost to be eligible for the Boiler Upgrade Scheme (BUS). Homeowners can now make their own decisions about how to improve their homes. However, government guidance still advises that properties should be appropriately insulated. An insulated home is not only more energy efficient, but it saves on heating costs too.

Updates to the government’s Boiler Upgrade Scheme (BUS) are designed to pave the way for more households across England and Wales to reduce their carbon emissions and cut their energy bills. The government is committed to supporting the transition to low-carbon heating and stands by its aim for 600,000 heat pump installations per year by 2028. The government has had to make changes to the Boiler Upgrade Scheme (BUS) as the uptake of heat pumps has been slow in the UK compared to other European countries.  

Removing the mandatory requirement for insulation to access heat pump grants means that families could reduce the costs associated with installing a heat pump on a semi-detached property by around £2,500. Households now have the opportunity to make changes at a pace that suits them instead of being hit with one big bill.

Since the increase in funding, applications for heat pumps have risen significantly. Here are some interesting statistics:

• December applications were up 49% on December 2022. 
• The average monthly number of applications from November 2023 to January 2024, has been 39% higher than the monthly average before the uplift. 
• 33,424 applications were made to the scheme up to the end of January 2024.
• 20,497 vouchers to properties across England and Wales (amounting to just over £113 million) were issued up to the end of January 2024.

Energy Security Secretary, Claire Coutinho, said:   

“We’ve already supported families by making our Boiler Upgrade Scheme (BUS) one of the most generous in Europe and now we’re making heat pumps even cheaper and easier to install.  
This is all part of our wider plan to ensure we cut our emissions and make homes more energy-efficient without burdening families with high costs.”

Although the latest change may be popular with many households from a financial standpoint, it’s important to consider whether the heat pump system will be as efficient without adequate insulation. Certainly, insulation specialists are not very happy with the heat pump grant changes. Until now the installation of cavity wall and loft insulation has been a condition of entitlement to the grant, and it has always been advised that without adequate insulation the effectiveness of the heat pump is impaired. Although this would be the case with all boilers it is even more so for heat pumps. 

Heat pumps usually work at lower temperatures than a traditional heating system, making insulation an important factor in getting the most out of the system. The insulation levels of a property can have a major effect on the heat loss of your home. If a house is insulated to the right standard, then the fact that a heat pump works at a lower temperature will not be a problem. If you can prevent heat from leaving your home, a heat pump will be able to maintain a comfortable temperature all year round.

The best insulation for heat pumps is whatever is most effective at helping your home retain its heat. Probably the most effective method of home insulation is in the loft as a house loses more heat from its roof than anywhere else. Insulating your loft is a comparatively easy and cost-effective method of keeping your home warm and getting the most out of your heat pump. Cavity wall insulation will also help your home retain heat and allow your heat pump to work more efficiently. This insulation method needs to be installed by a professional as it involves drilling directly into the cavity of your wall. However, if your home has solid walls, it will require insulation on the inside or outside of the walls which is a bit more costly than within the cavity. 

Families can get government help with energy efficiency through the Great British Insulation Scheme and Energy Company Obligation (ECO). These schemes have been set up to support up to 700,000 families with installing home improvements such as insulation by March 2026.  

David Hilton, Owner of Heat and Energy Ltd, said he was "very surprised" to see the government announcement and advised anyone thinking of installing a heat pump without also planning to add loft and cavity wall insulation to think carefully.

"I would encourage our readers to still embrace the fabric first approach. More insulation will always increase the efficiency of heat pump systems. Cheaper installation costs might seem more affordable, but it is a short-term win and a false economy. Always plan for fabric improvement."

He advised that heat pump technology can now "achieve higher flow temperatures" meaning heat output has improved from heat pumps but "the performance drops" at these higher temperatures.

If your house isn’t well-insulated another option would be a high-temperature heat pump which is more costly to install and potentially more expensive to run than a more conventional heat pump as it is likely to use more electricity. It would still be cheaper to run than an electric panel or storage heater system. 

Alsecco UK managing director Dean Broughton said: 

“Buildings need to be constructed with energy efficiency in mind, there is no doubt about that, and upgrading existing homes to be more thermally efficient is vital if we are to reduce carbon emissions in the built environment. 
However, quick fixes to boost specific targets, such as increasing the uptake of heat pumps, cannot be done at the expense of seeing the bigger picture. Homes that are constructed or retrofitted to be more thermally efficient will use less energy over their lifetime. Insulation is integral to this. 
The pitfalls of poorly insulated homes are well known and addressing heat loss and dealing with condensation will require more energy use down the line. We strongly believe that a fabric-first approach is needed to build homes that are fit for a more sustainable future, where thermal protection is built in to maintain a comfortable living environment.”

Although insulating your home does come at a cost, with some methods being more costly than others, all forms of insulation contribute towards greater energy efficiency.  Better energy efficiency leads to lower bills and a better-functioning heat pump.