The National Audit Office (NAO) report that the government’s assumptions
about levels of consumer demand and manufacturer supply of heatpumps are optimistic has been backed by industry bodies and MPs.
The government’s flagship Boiler Upgrade Scheme has also underperformed, the
NAO states, installing just 18,900 heat pumps between May 2022 and December
2023. DESNZ had expected the scheme would deliver 50,000 installations by this
point.
The Chair of the Environmental Audit Committee said the report is a timely
reminder of the challenges that remain in improving the energy performance of
our homes: “While the Government is making progress towards decarbonising homes
through insulation schemes, more remains to be done. Decarbonising older and
less efficient homes will be more difficult, but it is an unavoidable part of
the net zero transition.
“Rapid adoption of innovative technologies like heat pumps can play a bigger
role in moving these harder to insulate homes away from fossil fuel heat. But
successfully installing heat pumps often requires significant additional work.
The now disbanded Energy Efficiency Taskforce was expected to propose
innovative ways to make installations and retrofits more affordable; improving
affordability must remain top of the agenda.
“The Committee knows that decarbonising our housing stock is a central part
of the journey to net zero. Throughout this Parliament, we have sought to point
the Government in the right direction, and returned to examine this topic
frequently. We are likely to do so again before the next election, and I look
forward to conducting further scrutiny on the Government’s plans.”
Katrina Young, Practice Manager
(Heat Policy & Local Energy) at Energy Systems Catapult,
said: “The NAO report is clear in the challenges that need to be overcome
if we’re to decarbonise home heating at scale and pace. Policy support has
historically been focused on reducing up-front costs associated with heat pumps
and insulation. While important, other barriers - such as reducing the running
costs of electrified heating compared to a gas boiler – will hold us back. The
rebalancing of policy levies and charges on electricity and gas bills is
crucial to incentivise low carbon heating technologies. All options on the
table, however, have potentially unequal distributional impacts on households,
and the extent to which the policy will affect the heating system choice of
consumers is uncertain.
“The Electrification of Heat Demonstration Project – led by Energy Systems
Catapult – found that one of the key barriers faced by consumers when getting a
heat pump was the perceived disruption to their home during the installation.
Improving the consumer experience is fundamental to the acceleration of heat
pump installation. This includes providing clear, trusted advice and support
throughout the process.
“The NAO highlights the value of Local Area Energy Plans as an approach to
strategically coordinate the decarbonisation of heating. The scenario modelling
can provide cost-effective whole systems plans for a local area and identify
“low regret” projects that can ramp up the deployment of low carbon heating.
The next step is to make sure that these plans don’t sit on a shelf, and to
enable local government to take projects forward.
“For the benefit of consumers and industry, we need to tackle the hard
questions now. For instance, how do we handle the gas network during the
decarbonisation of homes? Whilst any decommissioning isn’t likely to happen
until the mid to late 2030s, there needs to be a coordinated and strategic plan
in place to avoid unequal burden of spiralling prices on consumers remaining
connected to gas.
“The lack of a clear decision on the role of hydrogen for domestic heating
is not helping the electrification of heat. The heating industry needs
long-term stable policy to have confidence to build or pivot their supply
chains and grow their workforce. There is an urgent need to increase the number
of tradespeople with the skills to deliver high quality low carbon heating
options, through re-training or upskilling existing heating engineers, as well
as attracting new entrants and tackling the diversity problem. We agree with
the NAO's recommendation that government provide more certainty on hydrogen’s
role in home heating before 2026.”
Russell Dean, Residential Product Group Director at
Mitsubishi Electric, said
the report
reiterates that now, more than ever, we must unlock the biggest barrier to
large scale heat pump deployment, which is high energy costs. “This is
essential for us to reach the government’s heat pump installation targets by
2028,” he added.
“Rebalancing the cost of electricity and gas
and removing levies from electricity bills will result in immediate savings for
households looking to make the switch as the rising cost of living places an
increasing strain on families across the UK. Failing to do so will be hugely
damaging to the decarbonisation of home heating – which accounts for 14%
of the country’s current emissions – and the country’s progress towards Net
Zero as a whole.
“With over
70% of consumers knowing little to nothing about how heat pump technology
works, educating consumers on the importance of heat pump technology will also
be crucial to encouraging wider uptake. This will ultimately accelerate
adoption, decarbonise home heating and help us hit the all-important Net Zero
goal.”
Cllr Darren Rodwell, environment spokesperson for the LGA said: “Decarbonising
homes and other buildings will play a huge role in achieving national net zero
ambitions, but it is clear that the current approach is not working.
“It is now time to shift to a locally led approach, which would mean
councils can target the homes that need the support most, while working with
local businesses to build skills and growth.”
