Incentivising heat pumps in the UK

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? :thinking:

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. :green_heart:

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? :money_with_wings:

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I’ve had an ASHP for 7 years. Low finance rates + RHI made this very easy to do even at the point of buying a new house (without central heating).

What is disappointing is the Energy companies have done virtually nothing to support these. Most ASHP have complex controllers that can be adaptive. I found out recently there is a 3rd party company that can interface my Nibe system to an Octopus Agile tariff and adapt my use to take advantage of the pricing.

Where is Bulb with this? You need to look at offering flexible pricing, and an interface that lets some service respond to changes by adjusting HP settings. Search the web for “homely Energy” that is an app that links Energy provider to HP.

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Hi @MountainMan :wave:

Great to hear you’ve had a positive experience with your ASHP. 2 of the main worries seem to be a high upfront cost and reliability during colder months. You mentioned the RHI has worked well, but how have you found the maintenance and running of your ASHP?

Technology that can further boost the efficiency of heat pumps will definitely be important in the decarbonisation of UK homes. Options like those you’ve mentioned will be important for energy savings and avoiding grid congestion by making sure your house is heated at the cheapest times throughout the day. It is also important to close the gap between energy providers and 3rd parties.

Thanks,
Cara :bulb:

I am thinking of investing in ASHP - although the upfront cost is putting me off.

£305 more per year for going green doesn’t sound like a good deal! Energy companies and schemes need to do more to make these an attractive prospect.

It would be good to know if Bulb will be offering any incentives with tariffs etc

Hi @Ricky.String :wave:

I can see you’ve also had a look at our post on financial incentives such as the RHI and Clean Heat Grant, which should go some way to helping recoup that initial cost.

I agree that tariffs will need to react. It will be interesting to see if there is a change in the disparities in tax for gas and electricity.

Cara :bulb:

I’ve been thinking about this for a while and I’ve got a few thoughts (oh dear).

If gas boilers are being replaced with heat pumps, we’ll all also need to install electric boilers for hot water won’t we? Are heat pumps even “compatible” with radiators? And then it’ll be a bit pointless (especially in rental accommodation where landlords are required to pay and get gas safety certificates) keeping things like a gas hob - during the summer our standing charge for gas comes to more than double our actual usage: so electric hobs and ovens will be the thing. What will happen to the “network charge” for the gas transporter pipelines (to the houses/streets) when customer numbers drop sufficiently?

Heat-pumps are compatible with radiators in theory but in most cases you’re need a certain amount of girth to the piping which older radiators don’t have - so chances are you’d have a lot of work to do.

Don’t think you need to install a new boiler - this is the boiler.

Hi @RichyB and @Ricky.String :wave:

Changes to radiators and the internal structure of the home, do seem to be a sticking point :thinking:

I think heat pumps are most efficient with underfloor heating and larger radiators, but it’s still possible to get some benefits with traditional radiators (as long as the rest of the home is efficient).

Cooking is another big source of carbon emissions in the home, so it will be interesting to see what changes might be needed.

Are there other factors that would hold you back from installing a heat pump or incentives that you’d like to see?