Calls For A ‘Fair Heat Deal’ To Kickstart the Market for Low Carbon Heating

More than 20 organisations representing builders and construction businesses, energy companies and civil society groups and including the UK Green Building Council and Federation of Master Builders have signed an open letter calling for a “fair heat deal” to incentivise households to install heat pumps and to ensure people on low incomes can gain access to heat pumps.

Other signatories include Energy UK, Friends of the Earth, thinktank E3G and the CPRE countryside charity.

Experts from these organisations have told the government that households on low incomes should be supplied with free heat pumps in order to drive the uptake of alternatives to traditional gas boilers and kickstart the market for low carbon heating.

Though heat pumps are a core part of the government’s net zero goals, they can currently cost thousands of pounds to install, with ground source heat pumps costing up to £35,000 each. However, the more heat pumps that are installed, the faster the cost is likely to come down. They are widely thought to be the best way to replace the UK’s gas boilers and to play an important part in helping the UK meet its climate targets.

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Around 14% of the UK’s greenhouse emissions come from heating the UK’s poor housing stock, most of which is draughty and energy inefficient. UK homes are ranked among the least energy efficient in Europe. The letter also calls for insulation to be made available to people on low incomes.

In September 2020, the government launched a programme to install insulation and low-carbon heating, called the Green Homes Grant, but abandoned it after just 6 months. Only a fraction of the homes targeted were insulated and sadly there were widespread complaints of poor service.

At the end of last year, the government had said that it wanted to install 600,000 heat pumps each year by 2028 in the 24.5 million homes that needed them, so the scrapping of the Green Homes Grant was disappointing for both renewable energy installers and homeowners.

Ministers are currently working on a new heat and buildings strategy, which has not yet been published. The government’s statutory advisers, the Climate Change Committee, have warned that reducing emissions from the domestic housing sector will be essential to reaching the UK’s target of net zero emissions by 2050.

A spokesperson from the Department for Business, Energy and Industrial Strategy said:

“We are already leading the way to ensure affordability and fairness are at the heart of clean heating reforms, and more detail on our approach will be provided in the upcoming Heat and Buildings Strategy. We are supporting lower income households and vulnerable people to make homes greener and cut energy bills and will continue to do so through schemes such as the Home Upgrade Grant and the new Clean Heat Grant from April next year.”

Juliet Phillips, a senior policy adviser at the E3G thinktank, one of the organisations behind the letter, said:

“Moving from a gas boiler to a heat pump is one of the biggest carbon savings a household can make. But it must be affordable, and we urge the government to support our fair heat deal to ensure no one is left behind in the green industrial revolution. If done right, the UK can lead the world in reducing carbon emissions from heat while slashing energy bills, boosting the economy and protecting the fuel poor.”

The letter also called on ministers to do away with environmental levies on energy bills, to ensure it is always cheaper to run a heat pump than a boiler and for grants to be available to all households not on low incomes. Ministers want to make sure the cost of a new heat pump is competitive with the cost of installing a new gas boiler.

Signatories of the letter also asked for the removal of VAT on green home products and installation and for changes to stamp duty to reduce the cost of homes that have been equipped with low carbon technology.

Mike Thornton, the chief executive of the Energy Saving Trust, said:

“For the UK to reach its net zero targets, we need real pace and scale in rolling out heat pumps. A fair heat deal will provide the confidence, clarity and certainty which will unlock the investment required for this.”

The letter also said that a ‘warm homes agency’ should be set up to train installers, create green jobs across the UK and maintain high standards.

Joe Tetlow, senior political advisor at Green Alliance, one of the letter’s signatories, said that instead of outlining how homes will be made greener it is “leaking like a draughty house, with briefing and speculation filling the void where published policy and positive progress should be”.

He added:

“The government needs to seize back the agenda, be bullish about its commitment to decarbonising homes and crucially, its intention to protect consumers.”

Despite the urgent need to tackle heating in the domestic housing sector the government admits that there are major challenges in convincing homeowners to install heat pumps. Last month they conceded that it was “uncertain” how mass uptake could be achieved.

An industry event held recently, outlined the problems facing the government. Some heat pumps are noisy and could breach permitted development regulations if placed too close to a neighbour’s window. This could be difficult to avoid in many buildings. Installation can also take several weeks in some cases and could cause significant disruption, while many homes would not have enough space for the kit required. The kit includes either an outdoor unit or ground array, added piping, a control unit, a hot water tank and a buffer tank.

Perhaps an even more serious barrier to the government’s plans is the lack of trained installers. A report by consultant EY published recently found that the UK would need to train almost 10,000 installers within the next four years which is 8 times as many as currently exist.

The report also said officials have not given the industry enough time to get ready for a planned ban on gas boilers in all new homes from 2025.

The BEIS says the government should follow the principles set out by the Climate Assembly UK and ensure fairness underpins the transition to net zero. Meanwhile we all wait for the government to publish their new heat and buildings strategy.