Send us a text
Join Nathan's guests David & Rob from Fornax and dive into the nitty-gritty of the Boiler Upgrade Scheme (BUS) consultation and explore how third-party finance could be the key to unlocking widespread domestic heat pump adoption. We'll break down the "finance gap challenge," look at what makes third-party ownership work, and dissect the pros and cons of different financing models.
In this episode, we discuss:
- The Finance Gap Challenge: Why current BUS grants alone aren't enough for mass market adoption and how existing loan products fall short for consumers and installers.
- The Power of Third-Party Ownership: How it dramatically increases heat pump installations by offering:
- Superior consumer protection: If the system fails, customers stop paying, and the financer is responsible for resolution.
- Risk alignment: Financiers are incentivized to ensure proper installation and ongoing performance.
- Better affordability and accessibility: Eliminates large upfront capital requirements.
- Support for installer businesses: Creates sustainable, predictable maintenance income.
- What Works: Consumer Hire vs. What Doesn't:
- Consumer Hire agreements: The only commercially viable third-party ownership model under UK regulation.
- Subject to robust FCA Consumer Duty protections—not "lightly regulated."
- Consumers have clear and simple mechanisms to keep their system; providers don't want them back!
- Why Hire Purchase models are problematic: Despite being highlighted in the consultation, they remain commercially unworkable due to existing financial regulations.
- Consumer Protection Reality Check:
- Consumer preference surveys don't equal deliverable products—regulatory constraints matter.
- Consumer protection isn't free: Every additional measure either limits access to affordable heat pumps or makes them more expensive/unworkable. Duplicative measures unfairly penalize consumers.
- Repossession rights are fundamental to risk pricing; removing them increases costs for all consumers (e.g., mortgages).
- Maximum term limits would reduce affordability and increase financial exclusion.
- Many proposed duplicative requirements (e.g., Ofgem doing things the FCA already does) deter small businesses and hinder independent installers.
- Innovation vs. Prescription Risk:
- Over-prescription risks stifling innovation just as the market gains momentum.
- Standard contract requirements could recreate past failures like the Green Deal/Green Homes Grant.
THIS SEASON IS BEING SPONSORED BY INTERGAS
Support the show
Learn more about heat pump heating by following
Nathan on Linkedin, Twitter and BlueSky
