Energy Guides

Boiler scrappage scheme: a guide

Updated: Monday 13 February, 2012

While the government has closed its boiler scrappage scheme, some energy providers are still offering discounts against the cost of a new boiler.

The boiler scrappage scheme of 2010 was perhaps a victim of its own success.

The scheme, a government initiative to encourage people to replace old boilers with more energy-efficient ones, offered a £400 voucher towards the cost of installing a new A-rated boiler. The government limited the scheme to 125,000 vouchers and assumed it would take a year for all the vouchers to be claimed.

The boiler scrappage scheme went live in January 2010 and by March all 125,000 vouchers had been snapped up by a public keen to participate in what was, in effect, a £50million giveaway. The government swiftly ended the scheme and, despite sustained encouragement from the energy industry, has no plans to bring it back.

Same scheme, different name?

One of the reasons the boiler scrappage scheme was a resounding success was the clarity and simplicity of the offer: scrap your inefficient old boiler get £400 off installing a new A-rated one. And despite pleas from the heating trade, in terms of the government offering cash subsidies for boiler replacement, nothing really replaced the scrappage scheme.

In August last year the Department for Energy & Climate Change (DECC) announced the Renewable Heat Premium (RHP) which offered a voucher up to £950 on a new boiler. The catch was the only type of boiler you can get a RHP grant for is a biomass boiler which burns logs or wood pellets. Many householders assumed the RHP was the boiler scrappage scheme under a different name, and were disappointed to discover it was not a simple case of junking their old boiler and installing a sleek new A-rated energy efficient one, so many of the boiler vouchers went unclaimed.

The confusion has been compounded by yet another similar sounding initiative which is part of the Energy Act of October 2011. The “Green Deal” hopes to bring energy efficiency into people’s homes. Funding for the Green Deal is expected to be available from autumn 2012, but it’s a far more complicated initiative than the scrappage scheme.

In a nutshell, the Green Deal will fund energy-saving upgrades for your home, such as boilers, draught-proofing, loft and wall insulation. The first caveat is you’ll have to get a property assessment first, which will lay out exactly which energy-saving upgrades are suitable for your property. The inspection will determine which parts of the Green Deal you’re eligible for: you may want a new boiler but the inspector might recommend loft insulation.

A loan, not a subsidy

Another caveat on the Green Deal is the financial aspect is a loan, not a grant or subsidy and the loan is from the private companies installing the energy efficiency measures. The government has yet to finalise the actual terms of the loan, but consumer watchdog Which? is warning consumers to be aware that as the finance comes in the form of a loan, anyone taking up the Green Deal will be expected to pay interest.

There’s a maximum amount of £6,500 per household and crucially this is tied to the home, rather than the owner, so if you move house the debt is passed on to whoever buys it. The loan is then paid back through the electricity bill over a 25-year period.

But check out the big energy companies

If you’re still looking to change your boiler, rather than seeking a subsidy, grant or loan from the government, check if any financial incentives are available from your energy supplier.

At various times, the “big six” energy suppliers - British Gas, EDF Energy, E.ON, npower, Scottish Power, SSE- have run promotions offering a discount on the installation of a new energy efficient boiler. Although npower has ceased offering domestic gas boiler installations, British Gas is currently offering £400 off any boiler it installs until 29th February this year.

However, don’t assume you’ll be automatically entitled to the discount: a British Gas heating adviser will conduct an energy efficiency assessment of your property advising you on ways you may be able to reduce energy consumption and save money. On this assessment hinges whether or not you’ll get the discount.

SSE (formerly Scottish & Southern Energy) says it offers a £400 saving on selected A-rated boilers but, on closer examination, these are only offered to residents in Scotland.

If you’re unsure whether or not your energy supplier is currently offering a discount on boiler installation, check the bumf you get with your next bill or check for links on your e-bill. Alternatively, call their dedicated customer services number, which should be printed somewhere on your bill.

What are the benefits of replacing a boiler?

Regardless of discounts and financial incentives, the main benefit of replacing your boiler is that it will help reduce your energy bills. New boilers are much more efficient and the government estimates that they could save households an average of £235 a year.

Replacing your boiler will also reduce your carbon footprint. The government says the 125,000 boilers replaced during the boiler scrappage scheme in early 2010 is expected to save 140,000 tonnes of CO2 per year - the equivalent to taking 45,000 cars off the road.