How to get from a cottage industry to a million heat pumps a year

This post is by Jan Rosenow, director of European programmes at the Regulatory Assistance Project, Pedro Guertler, programme leader at E3G, and Richard Lowes, research fellow at Exeter University.

The UK has made incredible strides in decarbonising its power system beyond what many thought was possible. Carbon emissions were at a record low over the recent Easter weekend. While heat pumps have been seen as a strategically important sustainable heat technology for years, the rapid progress in the power sector offers an urgent opportunity to decarbonise heating whilst supporting the integration of renewables.

The government highlighted the importance of electrifying heat in its Energy White Paper, as did the prime minister in his ten point plan, in which he committed to installing 600,000 heat pumps a year by 2028.

Fewer than 30,000 heat pumps were installed last year
It is an ambitious target: the UK needs to increase the number of heat pumps installed in homes each year at least 25-fold by 2028 to meet it. And a nearly 40-fold increase is required to meet the Committee on Climate Change’s trajectory of 900,000 heat pumps by 2028. To put this in perspective, approximately 1.6 million gas boilers were installed in UK homes last year, compared to less than 30,000 heat pumps. This demonstrates the scale of the challenge but also the opportunity for reducing emissions.

With the UK hosting crucial climate negotiations this year, there is a lot riding on the prime minister’s heat pump target being credible. The government needs to take bold, co-ordinated decisions this year to stand a realistic chance of achieving the mass market for heat pumps that will be needed by the end of this decade to stay on track. While the scale and pace of transformation set out can appear daunting, it is a necessary and achievable investment in the UK’s future.

The decade old Renewable Heat Incentive – a quarterly payment linked to the production of clean heat – has been fraught with challenges and has fallen far short of expectations. It was supposed to have supported 491,000 heat pump installations by this April, but had accredited just 63,000 by late 2020, 87 per cent short of the target.

An urgent step change is needed, both in the rate of installations and the policies that support them. The government’s soon to be published strategy for heat and buildings presents a once in a decade opportunity to trigger exponential change. Our report in March set out how to drive large scale deployment of heat pumps, drawing on successful approaches used to accelerate the adoption of electric vehicles.

Four pillars of a new heat pump strategy
To achieve this upsurge, households need guidance, financial support, incentives and standards to meet. Success requires the government to be strongly joined up, between ministries, and between Whitehall and local councils, and to work in concert with industry, banks and the supply chain. Adapting approaches used for electric vehicles to clean heating, we have made four recommendations in four areas, and each needs a clear decision from government this year.

  1. Governance

Convening a Heat Pump Council this year – similar to the Automotive Council that has been pivotal to ending petrol and diesel car sales by 2030 – would help the government to manage the step change and ensure every household opting for a heat pump has a good experience.

2. Financial support

Starting this year, to build the market, the government should begin scaling up the financial support offered to households to install heat pumps, mirroring the grants offered for electric cars. Initially, the plan could offer £6,000 for better off homeowners and £10,000 for low income households. Support should then peak at up to £3 billion in 2030, with the level of grant support for better off households falling over time as the market scales up and costs of heat pumps come down.

3. Incentives

Adjusting prices for electricity and gas to reflect their true relative costs can provide incentives while protecting fuel poor households. This can be done by pricing the cost of carbon emissions into gas consumption, rebalancing how the costs of clean energy investments are recouped from energy bills, and pricing heat pumps into property values by linking stamp duty to home energy and carbon performance. All of these measures are urgent, requiring introduction by the end of this parliament. They would enhance the economics of owning and running a heat pump – accelerating the rate at which grant support can be phased out – and sustain the market for the long term.

4. Standards

The government needs to clearly signal this year that it will phase out fossil fuelled home heating systems, with regulation allowing for a market led approach similar to the phase out of petrol and diesel cars in 2030. Ideally, this plan would eliminate oil heating systems from the late 2020s and gas heating systems from the early 2030s, sparking long term commercial investment in the skills and innovations needed to deliver the mass market for heat pumps.

Taken together, these decisions will lead the transformation from a cottage industry to a mass market for heat pumps. They will help drive down costs, support good quality jobs in the industry across the country, ensure green growth, and reduce UK reliance on energy imports while boosting domestic innovation and manufacturing. All these positive economic effects means there is no time to wait in getting the UK’s homes on track to net zero.

8 comments

  • Heat pumps, as we know, only work efficiently in well insulated homes and so the sensible proposals above have to go alongside a grant funded insulation programme or the end result will be more fuel poverty especially for those in the private rented sector.

    • We agree that we need to align the roll-out of heat pumps with a well-designed long-term energy efficiency programme, something we haven’t had in the UK since 2012. Energy efficiency is key in all of this.

  • Jan, your enthusiasm for heat pumps borders on having shares in them (?), but in view of the bad experience of some (not all) here in UK with such devices (having been taken in by zealous contractor sales persons) you have omitted one very important piece of counsel! Those considering following your keen suggestions should go to & their and all the correspondence associated with the My Home Farm family and their (& others) experience of installing, operating, maintaining & paying for heat pumps. Beware the cowboys!! Also, read https://energysavingtrust.org.uk/low-carbon-heat-pumps-debunking-the-myths/ (but in association with ‘My Home Farm’ correspondence!)

  • Ronald & Marlies MacLean

    We renewed our old heat pump in 2020 and were pleasantly surprises to receive the renewable heat initiative grant. It should be much better advertised. We should be manufacturing these units in UK too. Incentives to manufacturers would help. Progressive taxes on fossil fuels to reduce electricity would provide more incentive particularly with special tariffs. These might be tied in with Electric vehicle tariffs too. Photoelectric solar panels with grants and better Feed in payments could contribute to the proposed targets.

  • And, what about my comment, Jan?

  • I don’t have shares in heat pumps or any other clean energy technology and find this accusation unfair, inappropriate and unhelpful. My views are informed by my research and discussions with other experts in the field only.

    I’m aware of the My Home Farm experience and overall it seems to be positive based on what I read and watched. But then it is only a single case. Research by UCL on behalf of BEIS shows that for the sample analysed customer satisfaction was very high: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/607085/DECC_RHPP_161214_Case_Studies_v15_from_docx_.pdf

    And my work is not purely theoretical – I also have a heat pump myself in a 1880 Victorian terrace and have written about our experience here: https://foresightdk.com/how-we-reduced-our-energy-bills-by-60/ There are several others who have reported their positive experiences including https://trystanlea.org.uk/ and http://geography.exeter.ac.uk/staff/index.php?web_id=Richard_lowes

    I’m aware of the EST heat pump myth buster and have shared it before on social media – not sure what lessons it should teach me specifically?

    And finally, heat pumps supply more than 50% of homes in Norway with heating. They figured out a way of delivering heat pumps at scale we can learn from in the UK.

  • At last you have published it, Jan, thanks. My personal motive was based upon recent months of reading ‘My Home Farm’ stories of folks who have either installed them or are in the process of doing so, and the problems encountered. Too many have clearly had poor experience in contracting or operating them (& comparing them with previous heating sources), and so it is a good website to alert potential buyers to similar possible outcomes, and how to try and avoid them. Yes, there are also some success stories & the owners of ‘My Home Farm’ seem to be one of them. I merely wish to caution buyers to be careful & think through all the issues to be faced.

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