Labour’s biggest individual donor, green tycoon Dale Vince, has urged the Government to scrap its flagship heat pump subsidy scheme and instead invest billions of pounds in rooftop solar panels to cut energy bills.

The Ecotricity founder said the Government’s Boiler Upgrade Scheme (BUS) should instead be used to “solarise a million rooftops”, to save families “£500 off their energy bills” and still “generate an 8 per cent return” for the public purse.

The scheme has around £2.7bn of funding through to 2029-30 and provides grants of £7,500 for most air-to-water source and ground-source heat pumps, while air-to-air heat pumps attract a £2,500 grant.

In an interview with The i Paper, Vince said the scheme was poor value for money, arguing that heat pumps offered “no return ever” and provided no economic benefit.

He claimed that “30 per cent” of recipients would have bought a heat pump anyway and contrasted the spending with the “5 million people [who] can’t pay their energy bills”. The 30 per cent figure was a government assumption used when the scheme was designed.

Vince also said polling commissioned by his Green Britain Foundation had found two-thirds of heat-pump owners reporting higher heating costs than before.

The entrepreneur warned Labour in 2024 that pushing heat pumps as a mass replacement for boilers risked a political backlash, arguing that they could increase bills and that the government should consider alternatives.

However, his latest intervention goes further, with Vince arguing that the billions earmarked for heat pumps could instead be used to cut bills directly through the installation of rooftop solar panels.

He said the spending on heat pumps had “helped to toxify the whole net-zero turn”, creating space for critics to dismiss the agenda as “net stupid zero”.

Charlotte Lee, chief executive of the Heat Pump Association UK, pushed back, saying more than 90,000 people had already benefited from the Boiler Upgrade Scheme, with independent monitoring data showing a 94 per cent satisfaction rate among recipients.

She said the debate needed to be “grounded in evidence rather than broad claims that heat pumps provide ‘no return ever’,” arguing that properly sized and installed heat pumps – especially paired with solar and battery storage – could deliver “meaningful savings”.

The Government has said heat pumps can save a typical gas household around £250 a year on their bills.

Vince ‘speaking to Burnham’ about energy bills

The tycoon’s latest intervention is part of a wider four-policy package he is preparing for ministers, which he has dubbed “peoplenomics” – using economic modelling to make the case for redistributive policies.

“We’re making the economic case for socialism,” he said.

The first proposal is reform of the wholesale energy market – to control wholesale prices, including electricity, to slash energy bills. The second is a national housebuilding programme on brownfield land, which he set out in a paper last month. The third is a national rooftop solar programme, which he said would cut bills while delivering a return to the Government. The fourth is a package of tax reforms.

The plans follow his recent intervention on North Sea oil and gas.

Last week, Vince told BBC that he had moved from opposing new North Sea drilling to arguing that the Rosebank and Jackdaw oil and gas fields could make economic sense if wholesale energy prices were controlled.

Speaking to The i Paper, he rejected the description of his position as a U-turn, saying his proposal to control North Sea prices was published last year and that he had only recently seen how it could help resolve the political impasse over the two already licensed projects.

The Government is expected to decide in the coming weeks whether to give fresh consent to Rosebank, west of Shetland, and Jackdaw, east of Aberdeen. Both were approved under the previous Conservative government but were subsequently subjected to a legal challenge over the assessment of their emissions.

Jackdaw is currently seen as the more likely of the two to receive approval, with Rosebank facing stronger opposition.

Vince has proposed setting a guaranteed price for North Sea oil and gas based on the cost of production plus a profit margin – rather than leaving producers exposed to global market prices.

He said price controls could therefore deliver lower energy bills by allowing Britain to capture more of the value of the oil and gas produced in its own waters, rather than buying energy at global market prices.

Vince said he had presented the proposal directly to Prime Minister Andy Burnham, who had responded “positively”.

He described it as a way through what he called Burnham’s “Gordian knot”: the tension between climate campaigners opposed to new production and those arguing that the North Sea should be exploited for economic reasons.

Asked about his apparent change of position, he said: “I don’t accept that. This is a new position based on a… potential new reality.”

He insisted he was not lobbying Burnham simply to approve new drilling. “My starting place is how to bring energy bills down,” he said.

A Department for Energy Security and Net Zero spokesperson said: “Brits are showing record demand for heat pumps and solar panels – and our Warm Homes Plan will roll out clean power technology to millions. We are also making plug-in solar panels available to order this Thursday from retailers including Argos.”