Research shows how switch from gas boilers to heat pumps could make savings equivalent to 1.2% of GDP

Press Release: London, 11th November 2022

Analysis by Nesta, supported by industry campaign coalition Electrify Heat, has found that the accelerated deployment of heat pumps could be among the most effective solutions to the energy crisis. Heat pumps could significantly reduce the UK’s gas consumption, with each installation cutting home gas use by at least 70%.

Heat pumps reduce gas use and lower household bills – with significant UK-wide savings

For every heat pump installed, the UK can save around £1,100 in wholesale gas costs at current prices. A heat pump is likely to have lower running costs than a gas boiler over the coming years. If all 23 million homes with gas boilers switched to a heat pump based on the current, the savings in wholesale gas costs would be equivalent to around 1.2% of GDP.

The UK imports 60% of its gas, the largest share of which is used for home heating – in 2021, 37% of the total gas consumption of the UK was used to heat homes.

The research shows heat pumps are far more efficient than gas boilers; for every unit of gas it takes to heat a home with a boiler, heat pumps use three to four times less energy. Replacing a gas boiler with a heat pump reduces a home’s gas use by over 70%, assuming the makeup of the electricity grid remains constant.

Recommendations to get on track

The briefing sets out a series of recommendations to get on track. These include:

  • Provide long-term regulatory certainty to spur private investment, including confirming timelines for the phase out of fossil heating systems
  • Maintain support for the Boiler Upgrade Scheme, which provides £5,000 off the cost of an air source heat pump to pump-prime the market
  • Measures to boost the affordability of heat pumps, including reducing the cost of electricity to reflect low-cost of renewables
  • Ensuring long-term support for low-income households to support with the upfront costs

Juliet Phillips, campaign lead for Electrify Heat said:

“Heat pumps are the unsung hero to the gas crisis. This exciting clean tech is the tried and tested solution for lower bills and get us off gas – saving money for the household and public purse. We encourage the government to support measures to ramp up heat pump deployment to get the UK on track for warmer homes that cost less to run, confirming long-term support for measures like the Boiler Upgrade Scheme.”

Charles Wood, Deputy Director (Policy) at Energy UK, said:

“One of the most important ways that we can address the rising cost-of-living is by decarbonising our buildings. This means boosting the energy efficiency of homes and businesses and swapping fossil fuel heating systems for low carbon alternatives, such as air source heat pumps. Adopting low-carbon heating technologies in well-insulated buildings will permanently bring down energy bills, reduce our reliance on volatile gas and help the transition to Net Zero – as 20% of UK emissions come from our buildings.”

Brian Tilley, Head of External Affairs, E.ON UK said: 

“Improving the energy efficiency of millions of homes and moving the UK off gas heating is the only route to a cleaner and more independent energy future. We urgently need a heat pump revolution that will create jobs and lower our carbon emissions at the same time as increasing our energy security at this crucial time when global gas prices are harming people’s lives. If all homes with a gas boiler switched to a heat pump the savings in wholesale gas costs could be equivalent to around 1.2% of UK GDP. At a time when energy bills are at such an unprecedented high this could be a significant win for consumers at home and for the Government in working towards its COP26 commitments and net zero targets.”

Andrew Sissons, Deputy Director of Sustainable Future at Nesta, said:

“Heat pumps not only play a key role in getting the UK to net zero but while high energy prices are being subsidised by the Government they also reduce costs to taxpayers. By bringing down household gas use by as much as 70 per cent, each heat pump installed can save the Government and taxpayers around £1,100 per year. To make the most of this, the Treasury should consider ways to make the savings from heat pumps more effectively put money back in the pockets of consumers who install them, such as by permanently removing the Environmental and Social Obligation levies on electricity.”

Notes to editors

  • Electrify Heat is a cross-sector campaign calling for a shift to clean, efficient heating. Members including major energy companies, manufacturers, installers, consumer groups and financial institutions.