elemental spoke to Jeff House, External Affairs & Policy Director at Baxi, about the decarbonisation of heating, including where we are now and the challenges that must be overcome.
“There has been a lot of discussion in the industry, in government, and more recently among the public, about the best approach to reducing the UK’s dependence on fossil fuels, especially for heating – and Baxi has very much taken a technology neutral stance,” says Jeff. “We have invested heavily in heat pumps, hybrid systems, heat networks and hydrogen. However, net zero and decarbonisation is our long term focus. As a business, we have targets to be carbon neutral in our operations by 2030 as well as committing to ensure that from 2025 all the products we make will work with low-carbon energy.”
Where are we now?
Progress has been made – with regards to new build – for example with the Future Homes Standard coming into play in 2025 as well as new standards in Scotland in 2024. But that is only a small part of the overall issue, says Jeff. “There is still much more that needs to be done in terms of retrofitting existing buildings, to build on the positive steps forward that have been made with policy frameworks, such as the Heat and Buildings Strategy. We have 29 million homes across the UK, as well as businesses, that will require some kind of intervention to make them net zero compatible.”
The government’s Boiler Upgrade Scheme, which provides a grant to help cover the costs of new air source or ground source heat pumps, will not be sufficient to spur the kind of shift in the market that is required. Jeff explains: “The government has set out an ambition to grow the heat pump market to 600,000 units per year by 2028. The market currently stands at around 65,000 heat pump units per year, meaning we have five years to grow the demand ten-fold. The Boiler Upgrade Scheme will only support 30,000 installations per year over the next three years. A much greater level of support is needed.”
Cost is also an issue. Jeff says: “Data from the Department for Business, Energy and Industrial Strategy (BEIS) suggests that the median cost of air source heat pump installations on the scheme so far is in the region of £13,000. Therefore, even with a £5,000 grant from the Boiler Upgrade Scheme there is still a significant amount of money that needs to be found.”
However, there are areas where more rapid progress is being made. “Things are moving more quickly in the commercial sector. We are seeing that affordability is not the primary concern there. A lot of blue-chip companies especially, are looking at their sustainability targets and trying to get away from the use of fossil fuels. In many ways, they are ahead of legislation, which is coming, and in fact are helping to drive the industry forward through procurement demands for low carbon, sustainable solutions.”
What is needed for successful decarbonisation?
The decarbonisation of heating is a complex issue with many different factors influencing how quickly and easily it can be completed. One of the key issues that needs to be solved is energy demand. Jeff highlights the importance of improving efficiency: “Irrespective of the low or zero carbon heating technology used, energy efficiency is absolutely paramount, we have to reduce the amount of energy used across the board. We have the worst housing stock in Europe in terms of energy and thermal efficiency, which in itself is a barrier. Whichever decarbonisation pathway we take, we will have to deal with that initial hurdle and the need for retrofit intervention.”
Jeff believes that to overcome this challenge we need to solve the issue of funding for the whole-house upgrades, often referred to as ‘deep retrofit’, that will be required to achieve energy efficiency for many homes. “The reality is that we are currently in the midst of a cost of living crisis and many people are focused on paying the bills and simply don’t have the money to pay for a deep retrofit of their properties. This can be addressed in the longer term with funding schemes that will reduce the burden of that initial capital investment, but at the moment it is nowhere near the scale required to make the progress we need in the timeframe we are looking at.”
There is also a need to educate homeowners about low-carbon technology, primarily due to the differences to gas boilers. Jeff explains: “When a boiler breaks down it is a distress purchase. But the homeowner can typically get a new boiler for around £2000 and have it fitted the next day due to the availability of installers and the distribution of stock.
“When we look at the alternatives, it is a much more considered process. You need to factor in the fabric of the house, the heat loss calculations, the compatibility of the existing heating system and if updates need to be made for it to work with a different heating technology. This adds time and importantly cost, as well as disruption for the homeowner. More engagement is needed to help consumers understand the technology.”
Looking ahead
There has also been a lot of discussion about other technologies that could be an alternative to heat pumps for decarbonised heating, in particular hydrogen replacing natural gas. Jeff explains the current situation: “This is at a relatively early stage at the moment, with public demonstrations of prototype hydrogen boilers and plans to move up to progressively larger scale trials.
“We expect a decision from the government in 2026 based on the evidence from the trials. At Baxi, we are doing our bit as an appliance manufacturer to help to build the evidence base through collaboration on these projects. Ultimately policy will very much dictate what happens with hydrogen because you have to have a really clear framework that enables generation and distribution.”
Looking towards the next phase of decarbonisation, it seems unlikely that there will be one dominant technology in the same way that gas boilers are fitted in around 85% of UK homes today. Instead, there will need to be mix of technologies, Jeff says. “New builds, through the Future Homes Standard, are likely to go fully electric and that is perfectly sensible if the supply chain is in place to support it. When we start to look at the existing building stock, that is where things get a lot more difficult. More modern homes – those built from the 1960s onwards – lend themselves to heat pumps a bit more easily than the older properties as they don’t necessarily need as much intervention to make the system efficient. For the older stock, including those constrained by listed status or local conservation rules, we start to see some gaps that can’t be filled if we take a single technology approach. That’s where hybrid heat pumps, bio-fuels and potentially hydrogen boilers come in, as well as heat networks where it makes sense. We need a mixed basket of solutions. We are not going to get to net zero with a single technology.”
Summing up the need for industry to work together, Jeff says: “We now have a concerted effort to decarbonise heat and there is an understanding that it is a difficult proposition. We know that as a manufacturer, we are not going to achieve the end goal by ourselves. It needs collaboration across the entire supply chain and from installers right the way up to government, in terms of setting the framework to make things happen.”
In addition to his role at Baxi, Jeff also chairs the Heating & Hotwater Industry Council’s (HHIC) Heat & Hot Water Policy Group and is part of the executive committee for Hello Hydrogen. This industry group, which is made up of representatives from the gas networks, boiler manufacturers and energy suppliers, aims to support the development of hydrogen as an alternative to natural gas.
To find out more about what Baxi is doing to help reach net zero, visit: baxi.co.uk/about-us/the-future-of-heat.
