According to government plans published yesterday, low-carbon, more efficient heating technologies such as heat pumps will be no more expensive to buy and run than gas boilers and will be cheaper in many circumstances.
From April next year, homeowners in England and Wales will be eligible for £5,000 in subsidies to help them replace outdated gas boilers with low-carbon heat pumps. The payments are part of a £3.9 billion government strategy to cut carbon emissions from heating houses and other buildings.
The government has outlined its strategy for incentivising individuals to install low-carbon heating systems in a transparent, fair, and cost-effective manner as they replace their old boilers over the next decade in the Heat and Buildings Strategy. As a result, by 2035, the UK’s reliance on fossil fuels and exposure to global price surges would be significantly reduced, while up to 240,000 jobs will be supported across the country.
The £450 million Boiler Upgrade Scheme is part of the government’s announcement of more than £3.9 billion in new investment for decarbonising heat and buildings. The Social Housing Decarbonisation Fund, the Home Upgrade Grant scheme, the Boiler Upgrade Scheme, and the Heat Networks Transformation Programme will be used to fund the next three years of investment, as well as the Public Sector Decarbonisation Scheme, which will reduce carbon emissions from public buildings.
The money will also be used to make public buildings and social housing more energy efficient. But, according to experts, the funding is too low, and the approach is not ambitious enough. The subsidies, according to ministers, will bring heat pumps closer to the cost of a new gas boiler. However, the £450 million in subsidies over three years will only support a maximum of 90,000 pumps.
The quantity of heat pumps covered by the funds “just isn’t very much,” according to Mike Childs, head of science at Friends of the Earth, implying that the UK will fall short of its goal of installing 600,000 heat pumps per year by 2028.
“Investment will drive down the cost of heat pumps, and technical innovation plus skills training is a part of this, but so is scale. These grants will only incentivise the best-off households.”
Caroline Jones, a climate campaigner for Greenpeace UK, believes the government should provide more funding to speed up the transition from gas boilers to heat pumps.
“A clearer signal would have been a phase-out of new boilers before 2035,” she said.
According to Jonny Marshall, a senior economist at the Resolution Foundation, a poverty-focused think tank, the plan means the UK will struggle to fulfil its objective of halving emissions from households by 2035. By 2050, the United Kingdom has pledged to reduce its greenhouse gas emissions to zero. Boris Johnson’s government, however, has viable measures in place to deliver only around a fifth of this cut, according to a panel of experts who advise the government.
Heating buildings is a significant contributor to the UK’s overall greenhouse gas emissions, accounting for more than a fifth of total emissions, so the Heat and Buildings Strategy is under pressure to provide effective reductions. It comes as the government prepares to lay out its overarching strategy for reducing the UK’s reliance on fossil fuels and achieving significant carbon reductions over the next two decades.
Kwasi Kwarteng, the Minister of Business and Energy, said funds to assist the adoption of heat pumps, which will be available from April next year, will help to reduce the cost of the relatively new technology by 2030.
“As the technology improves and costs plummet over the next decade, we expect low-carbon heating systems will become the obvious, affordable choice for consumers,” Mr Kwarteng added.”Through our new grant scheme, we will ensure people are able to choose a more efficient alternative in the meantime.”
While households would be encouraged to replace their current boiler with a heat pump or other low-carbon technology, the government stressed that there will be no compulsion to remove boilers that are still operational.
The need for the UK to develop a stable, home-grown energy system that helps households in reducing their need for fossil fuels, such as utilising gas boilers, while protecting consumers and businesses from unforeseen price spikes, has been highlighted by recent unpredictable gas prices around the world.
According to industry experts, electric heat pumps are expected to cost the same to buy and operate as gas boilers in the future years. Electric heat pumps are already becoming more appealing to customers and more economical, and the government wants to encourage consumers to make a move as soon as possible.
Ministers plan to cut the price of electricity over the next decade by shifting levies away from electricity and toward gas to ensure that electric heat pumps are no more expensive to run than gas boilers. In 2022, a request for evidence will be issued, and decisions will be taken.
Sources in the industry applauded the new strategy. According to the Confederation of British Industry, which embodies larger UK businesses, the approach will assist members in preparing for the challenges ahead.
The CBI’s chief policy director, Matthew Fell, described it as “a golden opportunity for both the public and private sector to pick up the pace of progress to net zero.” However, he demanded “a clear delivery plan for consumers, businesses, and local authorities.”
Keith Anderson, Scottish Power’s chief executive, said it will “kick-start demand for electric heating,” allowing the industry to accelerate the delivery of electrification and quickly bring down upfront costs.”
Phil Hurley, the president of the Heat Pump Association, believes it will enhance industry confidence, allowing it to scale up and retrain in readiness for the “mass rollout of heat pumps.”
On the other hand, Joanne Wade of the Association for Decentralized Energy was dazed that “nothing about further supply chain support to build skills and de-risk market entry for smaller firms” was mentioned.