On 18th October the Government announced its latest ‘green’ policy that gives homeowners a financial incentive to install low carbon heating technologies, like heat pumps. From April 2022, households are to benefit from a £5,000 government grant through a £450 million Boiler Upgrade Scheme to help install low-carbon heating systems, part of more than £3.9 million of new funding to decarbonise heat and buildings.
The government has, of course, already had a variety of schemes aimed at incentivising consumers and developers to install heat pumps over fossil fuel heating systems. The current Domestic Renewable Heat Incentive (RHI) scheme – Ground Source up to £35k and Air Source up to £11,200 – is set to end in March 2022. But is this latest announcement enough to so that the UK can reach its target of installing 600,000 heat pumps every year by 2028?
Emma Bohan, General Manager of IMS Heat Pumps (a leading UK ground and air source heating pump installation company) and a Council Member of the Ground Source Heat Pump Association believes that financial incentives are only part of the solution.
“In addition to government incentives, we need to make heat pumps fashionable and highly desirable. It’s starting to happen, but just not at the pace that’s required” says Emma. “We’re increasingly finding that clients are coming to us because they want to do the right thing in terms of the environment, as well as future proofing their home against potential unfavourable legislative and pricing changes around fossil fuel heating systems.”
“There is no denying that even with the £5,000 grant, it remains more expensive to install a heat pump system over your standard gas boiler. The average cost for a heat pump is anywhere between £9k - £15k. Whilst the government hopes that ‘innovation’ can drive down the cost of building and installing a heat pump, the ever-increasing cost of the materials needed to build the technology makes this highly unlikely in the foreseeable future. Coupled with this is the shortage of skilled technicians and engineers needed to install the heat pumps. All these factors combine to keep installation costs high.”
“Thought also needs to be given to the Energy Performance Certificate (EPC), which provides a rating of a property’s likely energy efficiency” explains Emma. “EPCs are primarily used by would-be buyers or renters to give an indication of how much their energy bills might cost in their home. A report from the Environmental Audit Committee, released on 22 March 2021, called for the EPC methodology to be overhauled to support energy efficiency and low carbon heating measures.”
However, with scares over the security of gas supplies and rising costs, homeowners are opting for heat pumps over fossil fuel heating systems, even if that means additional cost at the outset. £5,000 thought will only service those with money to spare, leaving many still unable to afford the transition.”
“A £450 million budget will only help fund 90,000 installs, a long way from the 600,000 target the Government has set.
Of course, there is also the potential that the Government may take a more radical approach and legislate to stop new gas boilers or other environmentally unfriendly heating methods from being installed altogether should conscience and financial incentives not be enough.”
Emma Bohan is available for immediate interview or further comment.
