Researchers found that the 2023 grant increase raised monthly installations by 24 per cent more in England than in Scotland, adding roughly 7,200 units over the 20 months following the reforms. Scotland operates separate clean-heating schemes with grant levels that did not change in October 2023.

The research was carried out by the Grantham Research Institute on Climate Change and the Environment and the Centre for Economic Performance at the London School of Economics and Political Science, Imperial College London and UCL.

Similar capital grants for heat pumps are used in 22 European countries, the US, Canada, China, Japan and Korea, with the UK BUS scheme one of the most generous in the world. However, worries that a bigger heat-pump subsidy would simply be pocketed by installers at higher prices, have been found to be false as the larger grant made local markets big enough to attract more installers, and the extra competition pushed installers’ prices down rather than up. A case of free-market capitalism working well.

Aurélien Saussay, Assistant Professor at the Grantham Research Institute on Climate Change and the Environment, said: “The evidence is clear: increased grants for heat pumps are effective. Our research shows that through targeted grants we can see tangible results that help cut bills for consumers and lower their carbon footprint.”

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