Why now is the time to join the heat pump hype train
The UK cannot reach net zero if we continue to use fossil fuels to heat our homes. With 85% of UK homes currently connected to the gas grid, and more than 800,000 heated with oil, that means we’ve got some work to do.
The good news? We already know what the solution is. The heat pump. Mainstream in countries like Norway and Sweden, they will soon be common here too. That’s why we’ve started installing them for our customers. Unmatched comfort, three times more efficient than a gas boiler, and most importantly, zero carbon when powered with renewable electricity. What’s not to like?
The even better news? The government seem to know this too. They’ve put down clear goals – a target of 600,000 heat pumps installed each year from 2028, up from 30,000 in 2022.
But goals and ambitions aren’t always enough to deliver results. We need an actual heat pump policy to make sure that manufacturers and installers have the skilled workforce and supply chains they need. So home and business owners can make a positive decision to buy a heat pump without compromising on comfort, climate, or cost.
As part of its recent ‘Green Day’ of energy announcements, the government set out the next steps for its heat pump policies. There’s a lot of good stuff in there, and we’re going to take a closer look at some of it below.
Hop on the BUS
There have been several different government schemes that have provided financial support and incentives for people looking to clean up their heating. However, schemes such as the Renewable Heat Incentive (RHI) and Green Deal didn’t fully address the issue of up-front cost which has put people off making the change from a fossil gas boiler.
The latest policy to deliver help with the cost of buying a heat pump is the Boiler Upgrade Scheme (BUS). Provided you’re replacing a fossil fuel heating system, you can get £7,500 towards the cost of an air-source heat pump, which for many could bring the costs into line with those associated with simply replacing your old boiler like-for-like.
It’s just been extended to 2028 – a clear signal to homeowners, manufacturers, installers, and investors that the government see heat pumps as a leading candidate for low-carbon heat provision in the UK.
Rebalancing running costs
For several years now, addressing the imbalance in gas versus electricity prices has been top of the list of policies Good Energy has supported. Currently, because social and environmental policy costs are weighted towards electricity rather than gas, our bills are skewed to make gas cheaper than electricity, making running a heat pump more expensive than it should be. Rebalancing these costs would make running a heat pump significantly cheaper, and the Government has committed to sorting this out.
Holding developers to higher standards
It won’t surprise anyone to learn that the cheapest time to make a home energy efficient or run on low carbon heating is when it gets built. Building regulations for new homes will change in 2025, requiring that they meet much higher energy efficiency standards (the UK’s housing stock is among the draughtiest in Europe!), as well as requiring homes to be ‘zero carbon ready. This means that low-carbon heating will be essential.
Meeting demand
The challenge for the UK’s heat pump rollout is more one of supply than it is demand. We need make sure that we can manufacture enough of them, and that there are enough trained people to install and maintain them across the nation. To tackle the first point, the Government is currently consulting on the ‘Clean Heat Market Mechanism’ – a policy which would require anyone who makes heating appliances to make an increasing proportion of heat pumps each year from 2024.
This is necessary to deliver another government goal – a phase-out of all new and replacement fossil gas boilers by 2035. To make sure that there are enough people trained to install them all, new courses and funding will be made available to recruit new engineers and retrain those already working in the field.
By 2035, 90,000 low-carbon jobs will be supported by the heat pump industry. A revolution for green heat.
What’s next?
There is still a lot more to do. We want to see even greater ambition and funding from policymakers and industry to accelerate the rollout of heat pumps. Much of the initial budget for the Boiler Upgrade Scheme hasn’t been used because the start of the scheme was rushed. That unspent money should be ‘rolled over’ and used to deliver more heat pumps, and not disappear back into Treasury coffers.
The way we review the energy efficiency of our homes needs to be looked at too. Energy Performance Certificates (EPCs) are known to underestimate the potential of a heat pump’s energy-saving potential. That needs to change.
It’s also important that we make strides in modernising the energy system. Smart meters are an enabler of this, including better visibility of energy use, protection for vulnerable customers, and most pertinent to this conversation – flexible use of low carbon tech like heat pumps and batteries to save, or even make money. Everyone was supposed to have one by 2019, but current trajectories indicate that we might reach 85% coverage by 2025. We need to get it done.
Combined with other plans for improving the way that the industry accounts for the energy we use (known in the industry as ‘settlement’), there is enormous potential in exciting products and better, cheaper tariffs just waiting to be unlocked.
The big picture
The future of heating in the UK is going to be provided by heat pumps, flanked by district heat networks (powered predominantly by – you guessed it – bigger heat pumps) and direct electrical heating systems where demand may be lower.
Hydrogen is a fantastic tool that is essential for us to meet our net zero targets. For home heating though, the reality is that it’s role will be limited. Converting the entire gas grid to deliver it is a bit like using your smart phone to bang in a nail . It’s technically achievable, and a smart phone is a great tool, just not the one suited to this job. Heat pumps are the hammer – ready to drive home the decarbonisation of homes up and down the UK. There’s never been a better time to get one.
