Heat pump and boiler manufacturers got a boost from chancellor Alistair Darling's news of a boiler scrappage scheme offering households £400 to upgrade a G-rated boiler with a more efficient 'boiler or renewable heat unit'.
Chancellor Darling's pre-budget report, published on December 9, said £50m will fund the new 'Greener Boiler Incentive' scheme, to encourage 125,000 households to upgrade to more efficient heating systems.

Darling's report has prompted concern over why the government has limited the scheme to only improving the efficiency of 125,000 households with G-rated boilers. Only the first 125,000 homeowners who apply will benefit but there are estimated to be 4.5 million owners of SEDBUK Band G rated boilers who are eligible.

A boiler given a G-rating is in the lowest of seven bands used to measure central heating efficiency (less than 70% of a G-rated boiler's energy goes to heat the home or provide hot water).

The restricted scheme means householders who fit the criteria must get in quick to take advantage of the incentive, once it is launched early next year.

A spokesman for the treasury said: 'The government feels the need for such a scheme and this is a step in the right direction. This is an incentive which will be kept under review. The car scrappage scheme was extended because of its success. The incentive is there for households to act quickly'.

The Department of Energy and Climate Change (DECC) said they are engaging with the industry and stakeholders to establish details of how the policy will work including how households will receive the incentive. The government said it will work with industry to launch the scheme as early as possible in 2010.

News of a new boiler scrappage scheme was welcomed by campaigners, including the Baxi group, who early on called for a scrappage scheme and signed a Downing Street petition calling for it. View the Reheat Britain campaign here. The petition was posted by plumbers' merchant Mick Williams of Williams & Co., early this year.

Mick said: “I am absolutely delighted at news of the report and am waiting to see the outcome of the government’s proposals'.

'We were initially concerned that the scheme would only look at replacing old gas boilers for new gas boilers, which would have penalised green technologies such as air source heat pumps, so we are delighted that they have been included in the scheme,' said John Kellett, general manager of Mitsubishi Electric's heating systems division. which has developed the Ecodan range of air source heat pumps.

Dave Lacey, commercial director of boiler manufacturer Vaillant (UK & Ireland) said: 'We have seen how successful the car scrappage scheme has been and are looking forward to the boiler scrappage scheme following suit'.

In the pre-budget report, a total of £150m was also announced for Warm Front to provide better heating and insulation for an additional 75,000 of the most vulnerable households.