"The Strategy has set out some welcome steps towards supporting the lift-off of the UK heat pump market and is an endorsement of British low-carbon manufacturing and technology. But more will be needed for low income households"
Today (7th April) sees the launch of the Energy Security Strategy. The major focus is on supply-side measures to support power decarbonisation – with the Strategy stating that “95% of Britain’s electricity will be low carbon by 2030”. Decarbonising power is of course a critical part of the mixture of measures needed to get on track for clean, efficient and zero-carbon electric heating.
Ahead of the Strategy’s publication, Electrify Heat members supported a statement calling on the Government to “set out a plan for moving away from gas, including at its heart an ambitious, long-term heat electrification programme”, recognising the role that heat pumps have to play and setting out 3 key measures to get on track. Here’s how the Strategy stacks up against our three asks:
- Reduce the upward pressure on electricity bills through removing legacy policy costs: The strategy confirms that the government will consult on ‘rebalancing’ the costs placed on energy bills away from electricity to incentivise electrification this year, reducing the running costs of heat pumps.
- Make the transition to clean heat an affordable option for all: There is no new funding for green home schemes following a reported tussle between the Treasury and Number 10. However, regarding the new £450 million Boiler Upgrade Scheme, the Strategy notes that “We want as many people as possible who want one this year to be able to have one installed, so will continue to keep uptake of the scheme under review.” The Strategy also contains a welcome boost for heat pump manufacturing, running a Heat Pump Investment Accelerator Competition in 2022 worth up to £30 million, as well as a reminder of the zero-rating of VAT for the next 5 years, cutting £1,000 to £2,000 off the cost of an air source heat pump.
- Pave the way for smooth delivery with a focus on training and trust: The Strategy announced that by summer, the government will provide information to help households understand energy saving measures. By summer they will launch a comprehensive energy advice service and launch telephone support and specific local area advice for energy consumers. This could be a welcome step towards a nationwide advice service, as seen with Home Energy Scotland. We note that more could have been done to raise awareness of energy saving measures through a public-information campaign. The strategy contains no reference to skills and training, which will be essential for supporting the smooth and high-quality roll-out of heat pumps.
The Strategy has set out some welcome steps towards supporting the lift-off of the UK heat pump market and is an endorsement of British low-carbon manufacturing and technology. More will be needed to help low-income households benefit from safe and efficient electric heating, and we hope to see the government take opportunities later this year at the Autumn Budget. Plugging the skills and training gap will also be essential for effective delivery. However, the direction of travel is promising, and Electrify Heat members look forward to working with government to support this roll-out.
- 2022 analysis in from the Regulatory Assistance Project has shown that installing an efficient heat pump system today can save a typical UK household around 27% on their heating bills compared to a gas boiler – after the energy price cap rises in April 2022.
- Recent polling from NESTA and the UK Government’s Behavioural Insights Team has shown that 25% of homeowners would be willing to pay the full cost of a whole home heat pump installation (around £10,000-£12,000) while roughly one in three homeowners would be willing to pay a bit extra if it meant reducing emissions. For the rest, cost remains the biggest barrier to heat pump adoption, followed by information. The study was based on 1,081 homeowners in England and Wales.
- In 2021, The Electrification of Heat demonstration project, funded by BEIS and the Energy Systems Catapult, found that ‘there is no property type or architectural era that is unsuitable for a heat pump,’ based on a study of 742 different installations around the country.
- Modern air-to-water heat pumps will heat water to over 60 degrees and can work efficiently at an outside temperature as low as -25 degrees. The average air source heat pump is three times more efficient even than a top-rated gas boiler in its use of energy to heat a home to the same temperature.