85% of all heating systems in the UK are gas boilers. Heat pumps are a key part of the Government’s plan to reach net zero by 2050. However, installation costs are high and a report by Public First says that air source heat pump customers will pay £305 more per year for their energy bills in 2030. Could the cost and current heating systems be the reason why Britain is behind other countries in decarbonising heating?
Heat pumps require electricity to run. Current legislation means that policy costs like government, environmental and social schemes are added to electricity bills and not gas; these could be Warm Home Discount, Feed In Tariff or similar. The Public First report recommends moving policy costs to gas bills rather than electricity to encourage the move away from gas. This is especially important considering the ban on new gas boilers from 2025.
This year, Bulb led a call to scrap the standard 20% VAT on green technologies, including heat pumps, solar panels and EVs. This change would make green products affordable for many more people.
The Domestic Renewable Heat Incentive (RHI) is the first long-term financial support programme for renewable heat. It will encourage uptake of heat pumps, however the early closure of Green Homes Grant caused some disruption. The Heat Pump Federation urged for a “consistency of policy” saying that the closure of the scheme sent out the wrong message, particularly with the Prime Minister’s Ten Point Plan outlining a target of 600,000 heat pumps a year by 2028.
Experts in the field mainly agree that the installation of heat pumps will experience rapid growth in the UK, mostly driven by RHI tariffs, utilities initiatives and new regulations. Although to hit point 7 in the 10 point plan (600,000 heat pumps a year by 2028) more needs to be done.
Who do you think should front the cost for heat pumps?