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The Heat Pump Scheme
Home heating through salary sacrifice. We are working with HM Treasury to extend the mechanism to Energy Saving Materials.
- In development
- Stage
- United Kingdom
- Market
Salary sacrifice for heat pumps
The transition to Net Zero is moving at far too slow a pace, and the answer is simple: many clean technologies remain unaffordable for the British public. At times of economic uncertainty the high cost of assets like heat pumps is holding us back. The solution is simple… salary sacrifice.
Thus The Heat Pump Scheme was born.
Why salary sacrifice for heat pumps?
Salary sacrifice removes the high upfront costs as it spreads them over equal monthly payments and allows working families to pay for these from their gross salary - which makes them much more affordable.
We are not basing this on blind faith - the numbers on salary sacrifice for electric cars are in the public domain and they work. People with access to an EV salary sacrifice scheme (like The Electric Car Scheme) are almost 4 times more likely to switch to an electric car than somebody who doesn't. Replicating these numbers across the home heating industry has the potential to turbocharge progress.
When will The Heat Pump Scheme launch?
The Net Zero Benefits team are working closely with officials at HM Treasury to discuss the adoption of this proposal. We're calling on the government to leverage the upcoming Warm Homes Plan to extend salary sacrifice beyond electric vehicles to include clean technologies on the Energy Saving Materials list - such as heat pumps, home solar PV, other heating decarbonisation measures, and energy efficiency products.
This simple measure could spark a transformative increase in demand, with far-reaching impacts on net zero targets, job creation, and the growth of the renewables sector.
Join waitlistNet Zero Benefits campaign for expansion of heat pump salary sacrifice
Net Zero Benefits led a campaign to send an open letter, co-signed by the REA and over 30 industry leaders, urging Ed Miliband, Rachel Reeves, and Miatta Fahnbulleh to extend the upcoming Warm Homes Plan.
The goal is to expand the salary sacrifice scheme beyond Electric Vehicles to include clean technologies like heat pumps, solar PV, home energy storage, and energy efficiency products listed under the Energy Saving Materials (ESM) List.
Download the open letter (opens in a new tab)Related coverage
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Read articleInsight on Heat Pump Scheme
Analysis tagged to this scheme, written by our leadership team.
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The Heat Pump Scheme questions
What employers and employees ask before they take this scheme.
How does a heat pump work?
A heat pump moves heat from the outside air or ground into the home rather than burning fuel to create it. Because it moves heat instead of generating it, it delivers several units of heat for each unit of electricity it uses.
Can you get a heat pump through salary sacrifice?
Yes. The Heat Pump Scheme spreads the cost of a heat pump installation through payroll out of gross pay, which removes the up front cost that stops many households from switching.
Is there government support for heat pumps?
The Boiler Upgrade Scheme offers grants towards air source and ground source heat pump installations in England and Wales, with equivalent support elsewhere in the UK. Grant funding can be used alongside a payroll arrangement to reduce what is left to pay.
Will a heat pump work in an older home?
Heat pumps work in older homes, provided the system is designed for the property. That usually means checking insulation, radiator sizes and flow temperatures at survey stage rather than swapping like for like with a boiler.
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