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  4. Boiler Upgrade Scheme Consultation: Part 1 – Stimulating further demand for heat pumps and enhancing consumer protections
Policy Response
Jun 2025

Boiler Upgrade Scheme Consultation: Part 1 – Stimulating further demand for heat pumps and enhancing consumer protections

The Institution of Gas Engineers & Managers (IGEM) is the UK’s Professional Engineering Institution, supporting individuals and businesses working in the global gas industry. IGEM was founded in 1863 with the purpose of advancing the science and knowledge of gas engineering for the benefit of the public.


As a not-for-profit, independent organisation IGEM acts as a trusted source of technical information, guidance and services for the gas sector. In today’s net zero context, IGEM is focused on engineering a sustainable gas future – we do this by:


• Helping our members achieve and uphold the highest standards of professional competence to ensure the safety of the public.
• Supporting our members in achieving their career goals by providing high quality products, services and personal and professional development opportunities.
• Acting as the voice of the gas industry when working with stakeholders to develop and improve gas policy.


Our role across various industry and governmental groups sees us working directly with gas network companies, manufacturers, consultants, contractors, safety experts, academia, regulators, policy advisors and policy makers, to assess the evidence base and develop informed recommendations on the future of the gas grid.


We welcome the opportunity to respond to this consultation and aim to represent the collective views of IGEM Members and our gas industry stakeholders.


IGEM are broadly supportive of the government’s ambitions to allow Boiler Upgrade Scheme (BUS)-funded heat pumps to be installed alongside other low carbon technologies and its drive to stimulate demand. However, we are concerned that the current exclusion of hybrid heating systems from the BUS represents a missed opportunity to accelerate emissions reductions and optimise system-wide costs.


The evidence clearly demonstrates that hybrid heating systems can be a cost-effective, scalable and consumer-friendly pathway to decarbonising heat. Including hybrids in the BUS would deliver the following headline benefits:


For the consumer:
• Lowest cost heat, compared to a standalone heat pump or boiler.
• Low level of disruption and minimal behaviour change.
• Greater choice in their heating systems.

For the climate:
• Lowest carbon heat compared to a standalone heat pump, or boiler when using natural gas.
• Net zero today, if using a tariff with 100% renewable gas and 100% low carbon electricity.

For Clean Power 2030:
• Generation-led reinforcement of the electricity grid, rather than demand-led.
• Eases the challenge of hitting GB’s 2030 generation capacity targets.
• A flexible demand sink to soak up renewable power.
• Valuable fast frequency response services to secure a stable power grid.

For the UK Government:
• A contribution to the £300 bill reduction promised to voters.
• Faster deployment of heat pumps against target.
• A pathway to close gaps in looming carbon budgets.

Furthermore, when using dynamic electricity prices in hybrids, the fuel price ratio between gas and electricity is narrowed and achieves cost-effective use of the heat pump. With biomethane, that spark spread narrows even further – all without intervening in movement of policy costs.
A hybrid system will make use of the boiler, when:
• It is very cold.
• There are electricity grid capacity constraints.
• Electricity prices are very high (low renewables).
• It is higher carbon to use gas generation to power the heat pump, if it’s operating with low efficiency.
• Indefinite flexibility through aggregated turn-down (FFR) services is required.

At all other times, the heat pump can be working to provide heating that reduces UK gas demand, and therefore, UK emissions.

With green gas, hybrids aren’t a two-step process to net zero in the future, they’re one-stop shop to net zero today.

We urge the government to adopt a technology-agnostic approach and include hybrid systems in the BUS. We welcome the opportunity to discuss these recommendations further.

In regard to the consultation questions, we offer the following responses to those questions most relevant to IGEM’s expertise, within Part 1 of the consultation.

Consultation questions:

Question 1: Do you agree with the proposal to amend scheme eligibility criteria to allow more installations of heat pumps in combination with other electric heating appliances? Yes / No. Please provide evidence to support your response.

Yes and No.

IGEM support the expansion of eligibility criteria to allow more heat pump installations. However, we strongly recommend that the scheme be further expanded to include hybrid heating systems - those combining a heat pump with a gas boiler - as eligible under the BUS, as had been eligible under the domestic RHI.

Carbon savings: Hybrid heating systems can be optimised to achieve lowest total system carbon. Utilising natural gas in the boiler at times of low heat pump efficiency, is lower carbon than using natural gas in power generation to power a heat pump. Therefore, a hybrid heating system optimised to deliver least cost heat, with a minimum COP threshold backstop to optimise for lowest system carbon, delivers a lower carbon outcome than a heat pump alone.
Hybrid systems are net zero compatible, which is enabled by the growth of biomethane in the gas system. Evidence shows that hybrid systems with natural gas can reduce emissions by up to 60% today, rising to 80% by 2030 as the electricity grid decarbonises (Cadent, 2025). This level of reduction can make a significant contribution to the UK’s decarbonisation targets. If utilising a low carbon electricity and 100% green gas tariff, hybrid systems can deliver net zero heating today.
Modern hybrids use smart controllers to optimise for cost and carbon, preventing manual override by the consumer and ensuring emissions reductions (Passiv UK, 2022). This smart optimisation enhances the overall efficiency and effectiveness of the system.

Cost-effectiveness: Hybrid systems can shift heat demand to the heat pump during periods when there is a lot of low-carbon electricity available, and shift back to the boiler when renewable generation is more limited in supply. Research demonstrates how hybrids can meet up to 80% of annual heat demand via the heat pump, with the boiler used only during peak demand (Freedom Project, 2018; Gemserv, 2024). This switching behaviour, on the basis of renewable electricity availability and periods of peak demand, helps to deliver cost optimisation.

Evidence also shows that hybrid systems are 30–40% cheaper to install than standalone heat pumps (Eunomia, 2023). The current £7,500 grant for a full heat pump system could be halved to deliver a hybrid heating system – or two heat pumps installed for the price of one – which maximises carbon savings per pound of public spending. Over time, this could potentially be reduced further still to deliver three heat pumps for the price of one.

System benefits: Hybridisation alleviates the cost and time pressure associated with reinforcing electricity distribution networks. This allows a greater focus on reinforcing the electricity transmission system for the unprecedented ramp-up of renewable generation connections needed for Clean Power 2030.

Research indicates that hybrids can reduce peak electricity demand by up to 50%, easing pressure on the grid and avoiding £30–40 billion in network reinforcement costs (Imperial College London, 2021).

Consumer acceptance: Installing a hybrid heating system in existing housing stock can offer lower levels of consumer disruption compared to electric heat pumps, as significant building retrofit (e.g. installing a hot water cylinder, installing insulation, changing radiators, replacing microbore pipework etc.) is not a prerequisite, whereas these changes will often be required for a standalone heat pump to operate efficiently and cost-effectively (EUA, 2021). Hybrids also require a reduced degree of behaviour change put upon households – retaining some familiarity with the high temperature boiler alongside the heat pump.

Consumer research showed that 70% of participants in the HyCompact trial supported hybrid systems due to their familiarity, comfort, and low disruption (Passiv UK, 2022). This high level of consumer acceptance is crucial for the successful rollout of low-carbon heating technologies. Strategic flexibility: Hybrids can be a transitional or enduring solution, especially when paired with green gases. There is enough biomethane already connected, or in the process of connecting, that is enough for 1.2 million homes heated by a gas boiler, or enough for around 6 million homes heated by a hybrid system.


Hybrids offer a pragmatic pathway for any home, including hard-to-electrify homes and for consumers who are unable to afford or unwilling to pay for full electrification. This flexibility makes hybrids a versatile option for a wide range of properties and scenarios.
International precedent: Europe is leading the way on hybrid adoption after the UK shared the key learnings from the Freedom Project. In the Netherlands, hybrids account for 50% of the heat pump market, supported by government subsidies and policy frameworks (Cadent, 2025). This demonstrates the viability and effectiveness of hybrids in a real-world context.


Question 2: Do you have any views on the proposed eligibility criteria that should apply to multi-technology systems? Yes/No. Please provide evidence to support your response.

Yes.

IGEM recommend revising the proposed eligibility criteria to allow true multi-technology systems, including hybrid heating systems that incorporate gas boilers.

Our view is that the scheme should have the electric-only requirement removed. This unnecessarily excludes viable low-carbon solutions and limits consumer choice.

Up to 40% of UK homes may be unsuitable for standalone heat pumps due to space or insulation constraints (Gemserv; Intergas; EUA). Hybrids offer a viable, lower-disruption alternative, making low-carbon heating accessible to a wider range of households and supporting the government’s ambitious heat pump installation targets.

IGEM notes that requiring the heat pump to meet the full space heating demand of a property may not always be the most efficient or cost-effective approach. In multi-technology systems, such as hybrids, flexibility exists to adjust output from different technologies to manage grid constraints and security of supply concerns. While it may be appropriate in some cases, making this a universal requirement could limit consumer choice and increase costs unnecessarily.

IGEM’s view is aligned with the government’s own recognition of the role of hybrids in the Raising Product Standards for Space Heating consultation. Their inclusion in the BUS would reflect that position and support a more resilient and effective decarbonisation strategy.

Question 3: Should the BUS provide grants to support the installation of air-to-air heat pumps? Yes/No. Please provide evidence to support your response.
No.

IGEM Members have indicated to us that the proposal to support the installation of Air-to-Air Heat Pumps (AAHPs) within the BUS may not be best use of public funds.
Cost-competitiveness: AAHPs are already affordable and widely available without subsidy. Public funds should prioritise technologies that need support to scale.
Limited suitability: AAHPs are not suitable for many UK homes as a primary heating solution. They typically lack hot water provision and are used more so for zonal or supplementary heating.

Feedback from some members indicated that the inclusion of air-to-air heat pumps, is better suited as part of Energy Company Obligation (ECO), rather than the BUS.


Sources:

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