(Bloomberg) -- Two years after the UK announced a subsidy geared at boosting adoption of heat pumps in households, the policy is starting to make inroads, according to the minister in charge of it. 

The government offers £7,500 to homeowners in England and Wales who want to replace a fossil fuel heating system with a heat pump, one of the most generous subsidies in Europe. There were 2,380 applications for the subsidy in April, according to new figures, almost double the 1,233 applications received in April 2023. 

Annual installations, however, are still well below the government’s target of adding 600,000 heat pumps a year by 2028. Just over 60,000 heat pumps were sold into the UK last year, according to the Heat Pump Association. 

Martin Callanan, minister for energy efficiency and green finance, said that after a slow start, both installers and the public are becoming more familiar with the technology and the subsidy application process. It helps that the government increased the incentive from £5,000 to £7,500 last year, and that some utilities are offering discounts on energy costs for heat pump users. 

“Since we increased the grant levels in October, we’re seeing a massive uptick in applications,” Callanan told Bloomberg Green.  “We’ve seen that, across a number of grant schemes, they start off slowly and then as installers get used to it, as the public gets used to it, as the supply chain starts to ramp up, we’ll see an increase in applications.” The subsidy is slated to continue until 2028. 

Roughly 75% of UK households are heated by a gas boiler, and home heating accounted for just under a fifth of the UK’s carbon emissions in 2021. Heat pumps, a highly efficient form of electric heating, have been identified as the best solution for decarbonizing heating in many countries. But Britain’s rollout has been plagued by delays and skepticism. As a result, heat pump penetration remains far lower than in neighboring France and Germany, where annual sales are in the hundreds of thousands. Last year, £478 million in funding that the UK had allocated to support heat pump installations and other household-decarbonization measures went unspent.

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Heat pumps have also been the target of vigorous opposition from gas industry groups, who argue that existing boilers and gas networks should be retained and used for hydrogen. The government recently canceled plans to trial hydrogen heating in UK towns after campaigning from locals who were concerned about safety. A final policy decision on the role of hydrogen in home heating is expected in 2026, but Callanan said there is “no question” that heat pumps will be the primary technology. 

“What I found disappointing in the space is that certain vested interests who are trying to stop the advance of heat pumps and electrification for their own commercial interests are spreading, frankly, misinformation,” he said. “From an energy security point of view and a decarbonization point of view, we need to move more towards electrification, and heat pumps are by far the most efficient way of doing that.”

On Wednesday, the UK announced plans to hold a general election on July 4 that could mean new leadership from the opposition Labour Party. Over the past year, Prime Minister Rishi Sunak has weakened many of the country’s environmental policies — delaying a ban on new oil boilers to 2035 from 2026 and scrapping plans to hold rental properties to higher energy-efficiency standards. His Conservative party is currently 20 points behind in the polls. 

The Labour Party has “said very little about heating,” said Richard Lowes, a heating analyst at Exeter University and the Regulatory Assistance Project, a think tank. Labour has pledged to maintain the Clean Heat Market Mechanism, a Conservative policy that would mandate manufacturers to make a certain number of heat pumps from April next year. But one of Labour’s major funders, the GMB labor union that represents many energy and gas industry workers, has opposed the heat pump rollout. 

“I think there’s a real conflict there with what Labour has committed to and what the unions that support them will do,” Lowes said. The GMB has described heat pump installations as “middle class virtue signaling” and plans to stop new homes being connected to the gas grid as a threat to “working class jobs.” 

Many European countries experienced a slowdown in heat pump sales last year compared to 2022; the UK was one of the few countries where installations rose. But it’s still very far behind the rest of the region. “Compared to other European markets, we are not in a good place,” Lowes said. 

While the UK subsidy is a helpful policy for existing homes, some 65% of newly built homes in England and Wales currently have gas heating. Plans to bar developers from connecting new homes to the gas grid are expected to come into force next year, though householders in existing properties will be able to buy new gas and oil boilers until 2035. 

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