Heat Pump Firms Face Job Cuts as Government Preps Budget Cuts

Installers across the United Kingdom are preparing for a sharp drop in revenue after the government signaled it will reduce funding for home heating upgrades ahead of Wednesday's budget. The move threatens to disrupt a sector that has grown rapidly since the introduction of the boiler upgrade scheme in 2022.

The scheme provides upfront grants of up to £9,000 to homeowners who replace fossil fuel or electric heating with low-carbon systems. Bill Tuck, operations director at Sustain Homes in Watford, said approximately 75% of his customers rely on this subsidy to cover the cost of their new systems. He described the grant as the foundation of his business and stated he is unsure how the company will protect existing jobs if the funding disappears.

Tuck noted that attitudes toward heat pumps have changed since he began installing them six years ago. Established engineers now refer long-standing customers to him, indicating a shift in market demand. However, he warned that without the financial support, the industry could face serious damage.

Industry veterans cite past subsidy closures as a warning. Adam Killa, founder of Ask Renewables in Burscough, Lancashire, said his weekly installation count fell from eight to zero after the Renewable Heat Incentive ended in 2022. He reported that customers opted for £3,000 boilers over £15,000 heat pumps when the price gap widened. Jim Lacey, a plumber with two decades of experience, said the argument that lower running costs justify higher upfront prices no longer resonates with many buyers.

The sector also faces labor and supply chain risks. Tuck warned of potential shortages in installers, repair engineers, and units themselves if new apprentices are not brought into the trade. According to the Heat Pump Association, about one-third of heat pumps sold in the UK in 2024 were made domestically. Lacey noted that a sudden cut would impact manufacturers, delivery firms, and associated trades.

Government data indicates that heat from buildings accounts for nearly one-fifth of UK greenhouse gas emissions. The Department for Energy Security and Net Zero has labeled the 2020s a critical period for decarbonizing heat, though the UK lags behind other European nations. Norway has 632 heat pumps per 1,000 households, compared with 3.5 in the UK.

A government spokesperson said officials do not comment on budget speculation but affirmed a commitment to lowering family bills. The spokesperson added that the government intends to invest in clean, homegrown energy to protect households from volatile fossil fuel prices.