Red Ed Miliband’s heat pump bonanza cost taxpayers and bill-payers an eye-watering £498.6 million in 2025/26, new research shows. So much for the great green consumer revolution – it turns out the heat pump market still needs the state to keep it from freezing over.
Analysis of government data by the Energy and Utilities Alliance found that more than nine out of every ten heat pumps installed in existing UK homes during the year were backed by taxpayer or energy bill-payer subsidies.
Of the 49,880 air-source heat pumps installed in existing homes in 2025/26, 45,397 – 91 per cent – received support through government-backed schemes, including the Boiler Upgrade Scheme, ECO, SHDF and HUG programmes.
Once direct grants, ECO levies and VAT relief are taken into account, the analysis estimates that the total cost to taxpayers and bill-payers reached £498.6 million during the financial year. For a policy meant to save energy, it seems remarkably efficient at burning through public money.
Using government carbon-intensity factors and Ofgem consumption assumptions, the report calculates that heat pumps installed in 2025/26 will deliver lifetime carbon savings of approximately 1.14 million tonnes of CO₂e – a cost of £437 per tonne of carbon saved.
That, the report concludes, is above the government’s own valuation of carbon and puts heat pump retrofits among the most expensive carbon-abatement measures available. In other words, Miliband’s net zero crusade is proving less a clean-energy breakthrough than an expensive exercise in pumping cash out of households.
Mike Foster, CEO of the EUA, said:
The most striking finding is not the number of heat pumps being installed, but the extent to which the market remains dependent on subsidy. When 91 per cent of installations rely on public support, it is impossible to claim there is a genuine consumer-led market.’
Taxpayers and energy consumers contributed almost £500 million last year to support fewer than 50,000 retrofit installations. Before asking households to fund even more support, ministers should be able to explain what value they are getting for that money.
Dear oh dear. Miliband may dream of a Britain powered by heat pumps, but on these figures, the only thing being efficiently warmed up is the taxpayer’s credit card.
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