This post was originally published by Business Green.
The government is right. The way we heat our homes needs to change if we are to reach net zero.
Over 85 per cent of UK homes are currently heated using fossil gas and this accounts for around 16 per cent of total UK emissions. But getting those emissions down to zero is shaping up to be one of the most politically difficult parts of the government’s decarbonisation agenda.
Earlier this year, the government’s flagship green recovery policy, the Green Homes Grant, was hollowed out and then scrapped after poor administration. Last month, there was a backlash in The Sun and The Daily Mail on the cost of replacing gas boilers with low carbon alternatives. And now Steve Baker MP, a new member of the climate sceptic Global Warming Policy Forum, is doing his utmost to make noise on the Conservative backbenches and get ‘#costofnetzero’ trending on Twitter.
He is right, though, to raise the issue of cost. Last month, the BEIS and transport select committee chairs, Darren Jones MP and Clive Betts MP wrote about the need for costs to be affordable when greening our homes. Across parliament, all politicians will be mindful of their constituency postbags and how best to reflect public attitudes on the transition to net zero. Labour politicians, especially, will not want to be outflanked on issues like fuel poverty.
Indeed, recent surveys consistently list cost as the greatest barrier for consumers in switching to low carbon forms of heat, including the latest from consumer group Which?. If the government wants to keep the low carbon homes show on the road, it is imperative that the costs of transition are properly thought through. Sticks without carrots won’t work.
Though Steve Baker cites the Poll Tax disaster in his public warning to government, lessons can be learnt from more recent policy failures, such as the so-called ‘Dementia Tax’ in 2017. Everyone accepted a solution was needed for adult social care, but who pays, and how, made tackling the issue toxic. That punctured political football remains in the long grass and we can’t afford the same fate for low carbon homes.
Punitive taxes on gas boilers and obstructions to selling homes is not a vote winner, nor is it necessary. A fair heat deal, however, setting out the benefits and support for alternatives, can be.
As part of the upcoming Heat and Buildings Strategy, the government should set out a fair heat deal which will maintain public support for net zero and ensure nobody is left out of pocket in the fight against climate change.
For a start, grants should be provided to make the upfront costs of installing a heat pump the same as replacing a gas boiler. And for low income households, the entire cost should be covered. Currently, there are perverse environmental levies on electricity bills, whereas savings are applied to gas. This should change to make the running costs of heat pumps more attractive. Incentives could also encourage households to make green heat choices, such as a Green Stamp Duty that is lower for buyers of low carbon, energy efficient homes, and zero VAT on green products and renovation works that help to cut the carbon footprint of homes.
For the Treasury, targeted tax cuts to help speed up a fair and green transition would be a drop in the ocean. But there are cheaper things that could be done too, like improving public knowledge. At present, too little is understood about the transition to low carbon heat, contributing to scare stories in the press about people freezing in their homes.
But what of the increasing heatwaves, which also claim lives? Air source heat pumps, as well as keeping you warm in the winter, can provide cooling in the summer by sending cold water around your home.
Companies like Octopus Energy are doing their best to debunk myths and familiarise the public with heat pump technology, explaining how a fridge is a reverse heat pump, as is the air conditioning in a car, and that they are four times more efficient than traditional boilers. The company is investing £10m in the UK’s first major training centre for heat pump engineers and expects costs to halve in the next few years. Industry experts also believe heat pumps will be cheaper to run in the long term, once green taxes are removed from electricity bills and home insulation is improved.
But a simple, trusted tool, run by an independent Warm Homes Agency, or in partnership with a consumer group like Which? could help turn the dial further, increasing awareness and confidence. The public narrative has become overly negative, and the government must take some responsibility for that.
Right now, the Heat and Buildings Strategy should be setting out exactly how greener homes will be achieved. Instead, it is leaking like a draughty old house, with swirling rumour, briefing and speculation filling the void where published policy and positive progress should be.
The government needs to seize this agenda back, be bullish about its commitment to net zero and crucially, its intention to protect consumers. A fair heat deal can win the public’s support, but it is needed fast, because all this hot air about heat pumps is in danger of turning low carbon homes into a pipe dream.