Homeowners in England and Wales will be offered £5,000 grants to replace their old gas boilers with more eco-friendly heat pumps.
The scheme is due to go live from April 2022 and last three years, costing £450million, the government has announced.
The cash will be a vital lifeline to homeowners as ministers prepare to more or less ban the installation of new gas boilers from 2035.
But it will not cover the full cost of installing a heat pump - with homeowners having to dig out thousands of pounds on top.
Those who cannot afford the switch yet will have to wait and hope the price of the technology drops to an affordable level. The government is hoping heat pumps will cost the same as gas boilers by 2030.
Boris Johnson hailed the grants, part of a Heat and Buildings Strategy and Net Zero strategy published on Tuesday ahead of next month's COP26 climate summit in Glasgow.
The Prime Minister said: “Our new grants will help homeowners make the switch sooner, without costing them extra, so that going green is the better choice when their boiler needs an upgrade."
But Greenpeace campaigner Caroline Jones said: "Sadly the government has stopped short of what’s required.
“More money must be provided to rapidly increase the number of homeowners switching to heat pumps over the next few years, with full costs covered for families on low incomes.
"A clearer signal would have been a phaseout of new boilers before 2035."
CBI Chief Policy Director Matthew Fell added the grants will "help get the ball rolling" but a "clear delivery plan" is needed.
The boiler plan is part of £3.9bn of spending between 2022 and 2025 - including £1.4bn on public sector decarbonisation, £950m for the Home Upgrade Grant scheme, £800m for social housing and £338m for heat networks.
Finally there's a £60m innovation fund to make clean heat systems easier to install and cheaper to run.
So what is the policy and how will it work? Here's what you need to know.
What are heat pumps?
They are a way of heating homes with mains electricity - which can in future be produced sustainably - instead of gas.
Instead of using gas to heat water in a boiler, your heating system system is filled with a refrigerant fluid which is compressed and expanded as it moves round different parts of the circuit.
In an air-source heat pump, the refrigerant passes through a unit on the outside of the building where air is blown over the pipes, warming the refrigerant. Electricity is then used to compress it, raising the temperature further and allowing it to carry the heat inside the house.
In a ground-source heat pump, the heat is gathered from water circulating in underground pipes and then transferred to the refrigerant gas.
Why are they needed?
Tory ministers are focusing on heat pumps as a key way to achieve the UK’s goal of ‘net zero’ carbon emissions by 2050.
They will also reduce households’ direct reliance on gas, prices of which have rocketed in the last six months.
The UK has already announced it hopes 600,000 heat pumps every year will be installed by 2028.
All this should - in theory - help slow humankind’s impact on the environment and climate change. The government also hopes it will support 240,000 UK jobs in green industries by 2035.
Who can get the £5,000 grants and when?
A three-year-long Boiler Upgrade Scheme will launch in April 2022.
It will offer homeowners grants of £5,000 towards air source heat pumps. It's thought it will offer slightly higher grants of £6,000 towards ground source heat pumps, though that's not confirmed in the final government announcement.
The scheme will be worth £450million of taxpayer cash in total, or enough for about 90,000 heat pump grants.
As you may notice, that’s not nearly enough for everyone in the country.
The government have not released eligibility criteria, including whether there'll be a means-test to block the richest homeowners.
However, it's thought means-testing is unlikely and all will be able to apply on a first-come, first-served basis. The scheme will operate in England and Wales and be administered through the private firms that install the heat pumps.
Will the grants cover the full cost?
No. Heat pumps can cost £10,000 or more to install, meaning anyone who chooses to take the grant will also have to make a hefty down-payment themselves.
The government claims the amount households will have to pay on top of the grant is similar to the cost of a new gas boiler. But this can be around £2,500 - less than is likely needed for a heat pump.
The government has spelt out an ambition to reduce the average cost of a heat pump by "between a quarter and a half" by 2025.
And by 2030, the government aims for energy firms to charge the same for heat pumps as they do for standard gas boilers.
But the grant scheme appears to be designed for those (wealthier) trailblazers who are willing to put hands in pockets now.
Do I have to get rid of my gas boiler?
No. After an outcry, the government has stopped short of forcing Brits to get rid of gas boilers.
Instead, the target will be for "all new heating systems" in UK homes to move away from gas boilers by 2025.
This will mean either using heat pumps, or where these aren't practical, new technologies like hydrogen-ready boilers - more below.
What if we have no room for a heat pump?
Not all buildings are suitable for a heat pump. It requires an outside unit, and ideally - according to the Energy Saving Trust - would use underfloor heating rather than radiators.
There will be alternatives for other homes once new gas boilers are outlawed in 2035, but the future is still a bit fuzzy.
Ministers are looking at “heat networks”, which use a central source such as excess energy from a factory to heat a few thousand homes at a time. Currently 480,000 homes run on 14,000 of these across the UK.
Officials have also looked at options like putting hydrogen in gas mains, and allowing boilers to run on them. But this is at an early stage, with a decision only expected in 2026.
What about social housing?
Social housing is not covered by the forthcoming announcement. The government insist it’s already getting investment, including a £800m social housing decarbonisation fund.
