600,000 Heat Pump Installations a Year: How Do We Get There?

Current heat pump installations

The UK has installed over 250,000 total heat pumps, with 35,000 installed in 2023 under the MCS scheme. However, current installation rates fall significantly short of the government's 600,000 annual target.

International comparisons reveal that Scandinavian countries like Sweden and Norway demonstrate much higher adoption rates. However, Nordic nations include air-to-air systems in their figures, while UK data typically focuses on air-to-water installations.

Government support: increasing the BUS grant

In September 2023, the UK government increased the Boiler Upgrade Scheme grant from £5,000 to £7,500 for English households installing air-source heat pumps. Scotland offers equivalent support with an additional interest-free loan option of up to £7,500.

Despite these incentives, uptake remains slower than expected due to awareness gaps and cost differentials between gas boilers and heat pumps.

Tackling the "spark gap" and peaker plants

The spark gap — the cost difference between electricity and gas — represents a major barrier to adoption. Electricity remains significantly more expensive than gas, discouraging household switching.

Peaker plants (power stations activated during peak demand) drive electricity costs upward. Between September 2021 and January 2022, peaker plants averaged £287 per MWh compared to £69 from standard sources. By December 2022, costs surged to £5,000-£6,000 per MWh.

Foreign-owned peaker plant operators saw profits quadruple annually. Controversially, these companies were excluded from government windfall taxes applied to other energy firms.

Transitioning toward balanced, renewable-based grid infrastructure could reduce costs and enhance heat pump competitiveness.

Retraining gas engineers

There are 130,000 gas engineers in the UK — a critical talent pool for the heat pump transition, as traditional gas boiler use declines through legislation and renewable energy policies.

Seven key actions for engineer retraining

1. Increase financial support — More substantial grants or interest-free loans for retraining would reduce barriers for self-employed engineers.

2. Strengthen industry partnerships — Colleges should expand partnerships with renewable energy companies, offering hands-on training aligned with market demands.

3. Flexible learning options — Online, evening, and weekend courses enable working engineers to retrain without job disruption.

4. Increase awareness — Government-backed awareness campaigns should inform gas engineers about retraining opportunities.

5. Ongoing professional development — Continuing education programs keep engineers current with evolving renewable technologies.

6. Localised training centers — Regional training hubs make renewable energy education more accessible nationwide.

7. Fast-track certification — Fast-track programs recognizing existing skills streamline the transition for experienced gas engineers.

The role of large energy companies

Energy providers increasingly recognise heat pump technology's role in renewable heating futures.

British Gas is deploying heat pump installation services, leveraging existing customer base and training existing workforce.

Octopus Energy operates a Trusted Partner Scheme, vetting installers to high standards and offering competitive financing options.

UK planning & noise regulations

Permitted Development Rights expansions have reduced planning permission requirements for many heat pump installations. However, restrictions persist in conservation areas and listed buildings.

Air-source heat pumps must comply with 42-decibel maximum noise limits at property boundaries. Urban settings may require costly soundproofing measures or render installations infeasible.

The role of umbrella schemes and MCS certification

VitoEnergy exemplifies umbrella scheme value through comprehensive turnkey solutions supporting engineers transitioning to renewable energy installation.

The MCS Certification Scheme is essential for accessing government incentives like the Boiler Upgrade Scheme — only certified installations qualify for subsidies. MCS ensures proper installer training, raises installation quality, and promotes renewable technology long-term success.

Payaca's role

Payaca supports renewable energy businesses navigating operational complexity across project management, compliance, customer service delivery, team administration, and growth.

The platform centralises heat loss surveys, quoting, invoicing, field surveys, completion forms, and appointment/team scheduling — everything installers need to scale efficiently.