Draft Boiler Upgrade Scheme (Amendment to the Energy Act 2008 etc.) Regulations 2026

Luke Evans Excerpts

Wednesday 14th October 2026 General Committees

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse, in my first outing on an SI from a Department I spent 18 months in. Not only is it amazing how much things have changed; it is amazing how much they have not, given some of the arguments that have come forward.

As the Minister rightly set out, the draft regulations extend the BUS to thermal energy storage systems and make it a little easier for Ofgem to recover payments. However, it would be remiss of me not to point out the context of this debate, when we have heard in the media that this could be one of the schemes facing funding cuts.

We only have to look at paragraph 5.5 of the explanatory memorandum to see that it still refers to the £2.7 billion. We discussed this issue yesterday in Energy Security and Net Zero questions, when we asked whether every single penny of the warm homes plan—that £15 billion-worth of funding—would be kept. However, the Minister was unable to give an answer, so it will be interesting to see whether that will be the case today.

When we boil this SI down, the real question is whether this further extension of subsidy represents value for money. The Government’s wider ambition was to install 600,000 heat pumps a year by 2028, but deployment remains far below that level. Of course, this scheme was introduced by the Conservative Government, but we should judge policy by its results, and not defend it simply because we introduced it. The fundamental problem is that electricity remains too expensive. Rather than addressing the underlying problem, the Government continue to reach for subsidies. That risks having to ask taxpayers to compensate for an energy market that makes electric heating less attractive than it should be. There is also a question of fairness: households unable to afford a new heating system should not face additional costs to subsidise those who can.

Heat batteries may well have a role, particularly in homes unsuitable for heat pumps. We are not opposed to the technology; we are simply questioning the economics of subsidising it. The Government have announced a grant of £2,500 per installation, but they appear to have decided the level of subsidy before demonstrating publicly why that figure represents good value. In essence, Ministers have put the cart before the horse. A question still arises over whether the necessary standards have been established. If so, that is welcome, but standards tell us whether a system is safe and properly installed; they do not tell us whether it is worth subsidising. For example, a car can pass its MOT, but that does not mean the Government should give anyone £2,500 to buy it.

I therefore have three areas to explore. The first is the standards, which was also raised in the other place. Can the Minister confirm that all necessary product safety, design and installation standards are now in force? Will those standards assess real-world performance and not just safety? What redress will consumers have if properly installed systems fail to deliver the efficiency or savings they were promised?

The second area I would like to explore is the methodology. What evidence led Ministers to select heat batteries for taxpayer support? Heat batteries can store energy bought at cheaper times for use later. That may lower bills, but shifting electricity consumption is not the same as reducing it. The benefit depends on efficiency, household demand, electricity tariffs and the system’s operating life. Will the Minister publish the Department’s underlying analysis, including its assumptions about consumption, efficiency, running costs and lifetime carbon savings? How does that analysis compare heat batteries with other heating technologies? My question is not whether heat batteries work, but why the technology was selected for subsidy over other electric heating solutions. What criteria were applied and what alternatives were assessed? If another technology can deliver the same or greater carbon reduction at lower cost to the taxpayer, why should it not qualify?

That leads me to the final area: the costings. I simply ask the Minister how the Government arrived at £2,500. It would be helpful to understand what average purchase and installation costs were assumed. What annual running costs have been modelled, and what proportion of the total cost will taxpayers fund? Most importantly, what is the expected taxpayer cost per tonne of carbon saved, and how does that compare with the equivalent support for heat pumps? If the Government cannot answer those questions, how can this Committee judge whether £2,500 represents value for money?

Ministers may point to high satisfaction, as they did in the other place, among existing boiler upgrade scheme recipients, but satisfaction with one subsidised technology does not justify the price of subsidising another. They may also argue that the extension increases customer choice—the Minister mentioned that in his speech—but genuine choice requires clear information about installation costs, running costs and long-term performance, not simply the Government promising a grant. This is not an argument against innovation, but one for evidence-led policy and proper stewardship of taxpayer money.

We ask the Government to establish the standards, publish the methodology, and demonstrate the carbon savings and value for money, then determine the subsidy. Parliament should not be asked to approve an extension of subsidy without clear evidence that the Government have the economics right. The Minister would do well to explain not simply why heat batteries might work, but why the taxpayer should pay £2,500 toward them, and what measurable benefit we will see. Of course, this is all in the context of what will come in the Budget, so I am very interested to see if the Minister can answer those questions today.