2024 was a huge year in the clean heat policy space, with a change of Government and a veritable landslide of policy wins for the Electrify Heat coalition. This corresponded with a bumper year for heat pump installations with record-breaking levels achieved; all the more impressive against a backdrop of declining installations across European markets.
In the policy sphere, we saw financial support for households investing in clean heat continue to grow. The government provided an uplift and an in-year top-up to the Boiler Upgrade Scheme (the government’s flagship heat pump grant scheme for households) and plans are being drawn up for government-backed retrofit finance.
The world-leading Clean Heat Markert Mechanism was laid in Parliament and is set for a 2025 introduction, the Future Homes Standard has maintained momentum and is itself looking to be laid in 2025, and reforms to planning rules should make installing a heat pump easier than ever.
With record numbers of heat pumps being installed, record numbers of installers – many taking advantage of the Heat Training Grant – are being trained to fit them (7,000 by the end of Q3 alone). The government has also funded investment in accelerating the development of cutting-edge heat pump systems in the North of England.
Other exciting announcements include the planned establishment of a national retrofit advice service, an upcoming smart mandate for electric heating, and a long-awaited consultation on the reform of Energy Performance Certificates.
So, before we charge headfirst into the excitement of 2025, join us in taking a moment to recap how our coalition has done against our 2024 policy priorities. It’s Electrify Heat Wrapped!
1. Support for upfront costs
Year on year, Electrify Heat continues to advocate for and successfully unlock extra, targeted funding to accelerate heat pump deployment across the UK – and 2025 was no exception.
In 2024, demand for the Boiler Upgrade Scheme, the UK’s flagship domestic heat pump grant scheme, was so high that the scheme was at risk of reaching its £150 million second-year allocation ceiling months ahead of schedule. Electrify Heat members raised the alarm immediately with ministers and successfully argued for a £50 million allocation top-up to the scheme. This quick work averted a national installation hiatus and ensured continuity for installers towards the end of 2024. Following engagement before and after the election, the new government also pledged a significant uplift to the budget for the Boiler Upgrade Scheme, now to total £295 million a year.
Despite setting out our 2024 policy and campaign priorities early last year, something that wasn’t even on our bingo card was low cost, government backed finance for home retrofit, including heat pump installation. Following E3G’s publication of a report on the topic, the conversation has taken off, with many members and friends of the coalition publishing their own proposals. Our intel suggest that DESNZ have convened a team to progress the design of such a loan, which could unlock hundreds of millions of pounds worth of public and private investment. We are expecting new financing options to feature prominently in the government’s upcoming Warm Homes Plan.
2. Forge ahead on easy wins
Proving less ‘easy’ than anticipated, we still won big in 2024 on our two big-ticket policy items.
In November, Government announced that the delayed Clean Heat Market Mechanism, a mainstay of our coalition’s top asks for over two years, was finally green lit for introduction in April 2025. Boiler manufacturers will now be obligated to transition and futureproof their practices (on an industry-wide level playing field) by selling a set number of heat pumps as a proportion of their boiler sales (6% in year one). Concessions were made, and the payment-in-lieu level that obligated parties will be required to make for missing targets has been reduced from £3,000 to £500 for the first scheme year. However, getting this scheme into legislation is a monumental first step, a world first, and a massive win for Electrify Heat.
As for the Future Homes Standard, it is still on track for implementation in 2025, although technical modelling work now risks delaying introduction. Raising house building standards through the FHS will preclude the installation of fossil fuel heating systems in new-build homes, effectively ending the expansion of the gas grid in the UK. Electrify Heat members and friends of the coalition have mustered to form a working group to counter the fierce opposing lobby, to brief ministers on the facts, and to promote media and public support for the policy. Please reach out if you’d like to be involved or to discuss the FHS. This will be a major area of focus for Electrify Heat in 2025, so watch this space!
Another seemingly simple win came as the Government removed the infamous ‘1-metre rule’ from the Permitted Development Rights framework. This arbitrary rule had required heat pumps to be installed at least one metre from a property’s boundary and previously prevented up to 27% of customers from installing heat pumps without planning approval.
3. Boost skills and supply chain
By the end of September, over 42,000 certified installations were completed, surpassing the 2023 total of 40,426 – a 39% increase in the average monthly installation rate compared to 2023. This now brings the total number of certified heat pump installations in the UK to over a quarter of a million.
It was also a record year for new installers trained, with Heat Pump Association data showing that nearly 7,000 installers were trained during the first 9 months of 2024 alone. To meet this rise in demand, uptake of the Heat Training Grant has also continued to grow. Electrify Heat members continue to prove that the only limiting factor in accelerating clean heat deployment across the UK is the appetite, ambition and perseverance of our policy makers – industry is doing its part.
The Microgeneration Certification Scheme (MCS) has been working over the past year to redevelop its scheme, with the aim of reinforcing consumer protections. The new scheme, set to launch this January, prioritises high-quality installations and incentivises competent, trusted installers through a risk-based compliance system.
2024 also saw the first £5 million of the £30 million Heat Pump Investment Accelerator pot allocated to Ideal Boilers to supercharge the manufacturing of their cutting-edge R290 monobloc air source heat pump.
4. Advice and marketing
For over two years now, a national retrofit advice service for England has been a major ask of our coalition, and in 2024 significant progress is now being seen. We met with the Minister for energy consumers, Miatta Fahnbulleh MP, and the relevant teams at DESNZ extensively on the issue following the change of government. Our coalition member, Energy Saving Trust, recently published a report on the work they do on behalf of the Scottish Government, which highlights how independent, tailored advice is accelerating the deployment of heat pumps.
And with just hours left of 2024, on the 31st of December, the UK Government announced in a report responding to recommendations from the Environmental Audit Committee that:
“Recognising the importance of providing impartial trusted energy advice, the Government is going further to simplify the user journey for consumers on GOV.UK, by creating a single access point for all consumers, homeowners, landlords and tenants at varying points in their retrofit journey. It will simplify and expand the current government advice and information offer by bringing into one space the available sources of funding, links to trusted installers and other relevant information”.
5. Unlock and enable the full capability of all heat pumps
This is another key ask of the coalition that saw progress in 2024, and one discussed frequently with civil servants. Government announced in December that they plan to implement a smart mandate for electric heating appliances in 2026-27. This will require heat pumps to have smart functionality, which will allow users to optimise their energy use and cut costs.
There is still more to do in this space, including with regards to the introduction of a national half-hourly settlement, anticipating a response to the heat network zoning consultation and reviewing inclusion of other technologies such as heat batteries and air-to-air heat pumps in the Boiler Upgrade Scheme.
6. Remove levies from electricity bills
UK electricity prices are currently amongst the highest in Europe, and this is partly due to the cost of levies on the electricity bill. Moving these costs elsewhere, or providing an exemption for electric heating users, would remove this market distortion and deliver a significant reduction in running costs. Addressing this distortion, which artificially inflates running costs for electric heating users, must be a top priority for any government which is serious about achieving mass market heat pump adoption.
There is growing consensus that something needs to be done to lower the price of electricity relative to gas. Electrify Heat convened a series of workshops to delve into the nuts and bolts of how this could be delivered.
Several Electrify Heat members engaged with civil servants last year to look into ways to lower electricity prices – this is a hot topic! We have an expectation that the Department for Energy Security and Net Zero (DENZ) will consult on this in 2025.
7. Reform EPCs
Last but not least, after years of persistent campaigning across the green homes space and from this coalition, we finally have a consultation on reforming Energy Performance Certificates (EPCs). The consultation, whichcloses on the 26 February, proposes reforms which would encourage landlords to invest in low carbon heating technologies such as heat pumps and may see their EPC downgraded if they opt for a gas boiler. This would be achieved by including new metrics for energy performance, including for carbon emissions, fabric performance and heating system.
We don’t rest on our laurels in Electrify Heat, so please keep an eye out for an update on our 2025 campaign and policy priorities in the coming days! There is plenty more to do. Major developments to watch for include the publication of the Warm Homes Plan this spring, the Spring Budget itself, and upcoming consultation on hydrogen for home heating. Let’s forge on!