In 2020, just 36,000 heat pumps were installed in the UK, a decrease on the 39,000 installed in 2019. At a time when the heat pump sector should be growing rapidly year on year, it is stalling, and certainly nowhere near the installation rate required to get to the 600,000 per year by 2028 mentioned in the Prime Minister’s 10-point plan.
News that the UK government’s long-awaited Heat and Building Strategy has been delayed still further, is another blow to a fledgling UK industry, one that is essential to delivering a low carbon heating future. In our latest Q&A, Laura Bishop, Chair of the Ground Source Heat Pump Association (GSHPA) discusses what is needed to drive forward the sector, and the policies required to boost uptake through the 2020s.
1. Despite the Prime Minister’s welcome 10-point plan commitment, how frustrated are you by the lack of concrete government action to boost uptake of ground source heat pumps?
We obviously welcomed the 10-point plan commitment, but it’s not just the ground source heat pump sector expressing frustration now at the lack of progress. The Committee on Climate Change (CCC) has pointed out repeatedly that the 2020s must be the decisive decade of progress and action, with a wide range of trade bodies and NGOs also all backing urgent action on renewable heat.
As the CCC has said, it’s just not possible to deliver our low carbon future simply by wishing it, so we now need to see urgent policy action by the UK government and a clear strategy adopted to help deliver our low carbon heating future. The latest delay to the Heat and Building Strategy is unhelpful, and surprising in what is COP26 year.
2. Why do you think the UK government is being so slow to act?
The usual mix of Treasury conservatism, a lack of policy focus, not helped at all by the ongoing pandemic, competing technologies all vying for policy support, and a concern about costs and practicalities. None of these challenges are insurmountable.
The heat pump cost issue for example is overstated, once lifetime running costs are taken fully into account. But of course, we are going to need a temporary support mechanism to help drive the market, put downward pressure on installation costs, and crucially help deliver the expansion of heat pump supply chains and training, called for by the CCC. There are obvious parallels with earlier successful schemes for renewable electricity.
3. Realistically, what is an achievable target for heat pump installations in the UK?
The starting point must be the clear projections being made by the CCC. If we are to get on track to deliver net zero, the CCC has pointed out that the UK will need more than a ten-fold increase in heat pump installation rates within four years, delivering 400,000 heat pumps per year by 2025.
This should rise to over 900,000 per year by 2028, considerably more than the Prime Minister’s 10-point plan commitment. But last year, only 36,000 heat pumps were installed in the UK, marginally up on the 2019 figure. The market is currently flat, not helped by ongoing policy uncertainty and the recent green homes grant debacle.
A proper UK government strategy and the policies to back it up, for the rest of this Parliament and beyond, would transform the situation very rapidly, boost investment and training in the sector, deliver thousands of new installation jobs, and give more customers the confidence to invest in this proven technology.
4. What about cost? Is it realistic to think that a grant scheme will be generous enough to deliver the sort of installation numbers required by the CCC modelling?
We see an important but time limited role for grants. The industry cannot go from 36,000 installations to 400,000 in a year virtually overnight. The purpose of a 3-year grant scheme would be to help UK installation companies invest in training and expansion, to provide a level of quality control on installations, put downward pressure on prices, as well as drive uptake and give more customers the confidence to invest.
We support strongly the CCC call for a multi-year funding regime for heat technologies, which should include a capital grant for the installation of ground source heat pumps, with a target of 200,000 installations a year by 2025. After the debacle of the green homes grant, it is vital that the UK government works with trade associations including the GSHPA in the design and roll-out of any new grant scheme.
The industry cannot afford another unhelpful period of stop-start support. A properly funded grant scheme would also help to address the CCC’s call for the government to set out a “clear route for expanding heat pump and heat network supply chains,” and to do so, now.
5. Isn’t the main cost barrier to the uptake of heat pumps, the current disparity between electricity and gas prices?
Yes. Beyond a time-limited grant scheme, we also need to see a fundamental shift in the current difference in price between gas and electricity in the UK. Cheap gas and expensive electricity are one of the key reasons that heat pumps are not being deployed in the numbers that the CCC wants to see.
If we were to replace all gas boilers with heat pumps today, consumers’ bills would increase by around 17%, which is clearly politically unacceptable. What can be done about that? The costs of gas and electricity are driven by historic levies that load environmental taxes on to the electricity price but not on to the gas price. That was OK when electricity was being generated by high carbon sources such as coal and wind and solar in the UK were in their infancy.
However, we are now seeing huge change in the carbon intensity of the grid, and it therefore makes sense now to transition the levies from electricity to gas. In this way, we would start to see the cost of gas and electricity rebalanced to make electric heating systems stand on their own two feet. We are very hopeful of a government consultation on this issue later this year.
6. Aren’t ground source heat pumps just an impractical option for most people?
Individual ground source heat pumps on a per household basis may not be appropriate for everyone, which is why we are also calling for a more fundamental review of how GSHP are deployed, including a street-by-street approach and as a matter of course in new housing developments.
GSHPA is pushing for the energy efficiency retrofit of existing homes to be made a national infrastructure priority, supported by HM Treasury. This needs to be on a street-by-street basis, with ground loops treated crucially as long-term infrastructure assets. In our view, this would transform uptake of ground source heat pumps, including at community and business level by helping to address current financial barriers to individual installations.
7. What’s your message to the Prime Minister?
In the run up to COP26, the UK needs a credible new strategy and a much stronger policy framework for decarbonising heat over the next three decades, including urgent action in the 2020s. The UK government’s long-awaited Heat and Building Strategy was originally due by Summer 2020. It is vital now that the Strategy due out later this year, sets out a clear, urgent, and properly funded pathway for ground source heat pumps in the UK, as part of a credible long-term low carbon heating strategy. This sector can help deliver the investment, jobs, innovation, and training needed to deliver our low carbon heating future, but we need policy certainty, commitment, and a clear sense of direction from the Government.
