The global race towards clean, electric heating is getting hot – the UK should act fast

“The global race towards clean, electric heating is getting hot – the UK should act fast to get a share of this booming market opportunity."

Juliet Phillips, Electrify Heat

Around the world, a growing number of countries are looking to accelerate the shift away from fossil gas heating and towards mass heat pump deployment in response to the war in Ukraine, cost of living crisis and sky-high oil and gas prices – including Germany and the Netherlands. Most recently this included a bold move from the White House to make use of the Defense Production Act (DPA) to accelerate domestic production of clean energy technologies.

This is a huge opportunity for the UK to accelerate manufacturing and export opportunities – harnessing it’s gas boiler manufacturing capabilities and channelling them into clean heat technologies like heat pumps (as shown technically possible by a recent BEIS report). The UK could risks missing the boat if it doesn’t move quick to race ahead on clean, electric heat. Now is the time to go big if the UK wants a piece of this rapidly growing market – as recently backed by Infrastructure Tsar Sir John Armitt.

Electrify Heat’s new report profiles how countries around the world are incorporating heat pumps into their response to the gas crisis – highlighting key lessons and recommendations for the UK on how to get ahead. These include:

Pump-priming the market

Around the world, countries are ramping up incentives to support households with the upfront costs of heat pumps and complementary fabric efficiency measures. This includes a coverage up to 110% offered in Italy and generous subsidies of up to €9,000 in France. Lessons for the UK might include increasing the number of recipients of the Boiler Upgrade Scheme to cover more homes (the scheme can currently support 30,000 per year – falling below the UK government’s target to install 600,000 heat pumps per year by 2028).

Insulating homes to isolate Putin

The UK remains behind the rest of Europe when it comes to energy efficiency; currently 80% of mid-to-low income households living in inefficient homes have no access to nationwide subsidy support. Providing support for more households to help insulate their homes – as seen in many countries – would help reduce heat loss and thus energy demand, helping reduce gas dependency.

Scaling attractive green finance

Germany is boosting its landmark loan programme to fund renovation by nearly €5bn. Since 2006, 6 million housing units have benefitted from this scheme. The UK could take a similar approach through its new UK Infrastructure Bank, offering subsidised loans to households via retail banks.

Reducing running costs of low carbon electric heating

Through removing taxes and legacy policy costs from electricity bills, the UK can follow the lead of France and other countries to make the running costs of clean electric heat more affordable.

Regulations and targets

Policy certainty plays a key role in providing long-term signals to spur investment, innovation and action from households and industry. The UK could follow the lead of Germany through cementing the proposed timelines for the phase-out of fossil heating into law, accelerating the introduction of the Future Homes Standard and confirming the pathway ahead for the implementation of Minimum Energy Efficiency Standards across different housing tenures. 

Supporting skills, supply chains and manufacturing

Ensuring that the supply chain can meet increasing demand will be critical for ensuring successful delivery of the clean heat transition. Through investing and supporting good jobs in clean heat, as well as providing more support for manufacturers, the UK can help boost domestic innovation, design and engineering capacity – skills and resources which could help put Global Britain on the map.