Heat Pumps Still Too Expensive Government Warned
Just a few days ago we announced that the Department for Energy Security and Net Zero were making changes to the government grant scheme for heat pumps (Boiler Upgrade Scheme) designed to make them cheaper and easier for families to install.
Moving forwards homeowners will now have more choice in how they improve their home and will no longer have to install cavity wall or loft insulation to use the scheme, which offers grants of £7,500 off the cost of heat pump installation.
Removing mandatory cavity wall and loft insulation could reduce the costs associated with installing a heat pump on a semi-detached property by around £2,500, making it easier for homeowners to switch from gas boilers in a way that works for them, while still cutting emissions. Read the full announcement >
Now perhaps we understand exactly what’s behind this move after the publication of a hard-hitting report from the National Audit Office which didn’t hold back in its criticism of DESNZ!
Background to the heat pumps report
Heating the UK’s 28 million homes accounted for 18% of all UK greenhouse gas emissions in 2021, the most recent year for which data are available. The main source of these emissions is from burning natural gas to heat homes. Reducing emissions from heating homes is therefore a key component of the government’s overall target to achieve net zero greenhouse gas emissions by 2050.
In October 2021, the government published its Heat and Buildings Strategy. The strategy made a range of commitments aimed at developing markets and consumer choices for heat pumps and heat networks, and stated the government’s ambition to end the installation of new fossil fuel boilers by 2035. It committed to:
- growing the supply chain for heat pumps to a minimum market capacity of 600,000 heat pump installations per year by 2028
- developing the evidence base to inform strategic decisions in 2026 on the future role of hydrogen in home heating, and therefore the future heating technology mix
In October 2023, the government clarified that heat pumps and heat networks will be the primary low-carbon technology for decarbonising home heating over the next decade and will play a key role in all pathways to 2050.
Also in October 2023, the National Infrastructure Commission, which advises the government on major long-term infrastructure challenges, recommended that the government should not support hydrogen for home heating. The government maintains that it needs to establish the evidence base before taking decisions on hydrogen, but has also stated that no one should hold back on installing a heat pump or connecting to a heat network on the basis that hydrogen might be an option later.
Findings of the report
The report set out to examine the progress DESNZ has made in decarbonising home heating since the publication of the Heat and Buildings Strategy in 2021. It also looks at the clarity of the pathway to decarbonising home heating in a way that represents value for money.
It goes on to assess the progress in rolling out heat pumps, and makes recommendations aimed at supporting DESNZ to maximise value for money as it develops its approach to decarbonising home heating.
The key findings are summarised as follows:
- Aspects of DESNZ’s overall pathway remain unclear, particularly as DESNZ works towards determining the role of hydrogen in home heating. It should not extend this work beyond what is necessary to come to an informed decision, recognising that uncertainty could hamper progress and drive up costs while consumers and businesses wait for further clarity.
- DESNZ also needs to get to grips with other longer-term challenges, such as the future of the gas networks and plans for reaching harder-to-decarbonise homes, to ensure it has a clear, enduring plan that maximises the value of public and private investments in the transition.
- Despite these uncertainties, it has become increasingly clear since the 2021 Heat and Buildings Strategy that the government’s approach will centre on heat pumps as the main technology. But DESNZ’s progress with encouraging households to install heat pumps has been slower than planned because costs remain high and public awareness remains low.
- DESNZ must ensure its mix of incentives, engagement and regulations draws on ongoing experience to address these issues, and support the rollout of heat pumps in a way that minimises the long-term costs to both taxpayers and consumers.
“Government needs to engage every household to achieve its objective to decarbonise home heating as part of the transition to net zero. DESNZ’s progress in making households aware and encouraging them to switch to low-carbon alternatives has been slower than expected.”
“DESNZ must draw on its experience to date to ensure its mix of incentives, engagement and regulations addresses the barriers to progress in its current programme of work.”
Gareth Davies, the head of the NAO.
Conclusions
Clearly the government remain committed to the roll out of heat pumps and clearly there is more work to do yet.
The subsequent announcement of changes to the Boiler Upgrade Scheme making it simpler and more attractive to install heat pumps were met with mixed reaction with many industry experts critical of the removal of minimum insulation standards prior to their installation (what’s the point in more efficient heating if we’re not insulating the building properly first).
There’s also mixed public opinion and mixed messages on the effectiveness of the technology too so clearly there’s still going to be more to follow in the way of PR and perhaps even greater incentive … watch this space!