Government unveils plan to drive down costs of low carbon heating

The government has set out its plan to drive down the cost of low carbon heating technologies like heat pumps, working with the industry to ensure that in future they are no more expensive to buy and run for consumers as fossil fuel boilers.

A £60m innovation fund has been launched to make clean heat systems smaller and easier to install and cheaper to run. Funding supports government’s confirmed ambition for all new heating systems installed in UK homes from 2035 to be low carbon.

Joseph Daniels, an independent advisor to the Government on decarbonising construction and CEO of modular housing company Etopia Group, said: “Decarbonising our existing housing stock and guaranteeing that new development meets and exceeds binding net-zero obligations should be at the forefront of a Green Industrial Revolution.

“Retrofitting is by all estimations the elephant in the room. The Office of Budgetary Responsibility forecasts that more than £400bn will be required to reach a carbon-neutral built environment. That is a titanic burden on our national finances — almost half of the UK’s entire budget revenue in 2020 — which will require a lot more progressive thinking than the introduction of air and ground source heat pumps and a phasing out of gas boilers. Housing has the potential to be a net sequester of carbon if we seek to adopt and combine cutting-edge low carbon technologies that are already in use.

“The UK’s gas-guzzling homes are now responsible for 20% of the total emissions. At Etopia Group, we’re calling for houses to feedback energy into the grid; to leverage isolated battery storage, and to integrate renewable solar panel technologies. The Heat and Buildings Strategy must prioritise and incentivise best-in-class examples, as Homes England has already been championing. Etopia is the first housebuilder to commit to achieving the EDGE Zero Carbon certification, a carbon-neutral accreditation backed by the UK Government which raises the bar of what’s possible through carbon efficiency.

“While we welcome higher standards, the incentives expected must recognise and reward the pioneers rising the tide to lift all boats.”

The Government is yet to release the full ‘Heat and Buildings Strategy’ but from the details they have published, it is clear they are thinking ahead on this vital topic.

Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “Heat pumps are a technology which can be delivered at scale. The Government is therefore correct to indicate a work pipeline for this cottage industry, otherwise there won’t be enough engineers getting trained and the cost of installations will not go down.

“With the Government banning gas in new builds from 2025, we cannot be in a situation where homes cannot be built because the heating elements cannot be completed, or consumers who want heat pumps are competing with housebuilders for skilled installers.”

As part of the Heat and Buildings Strategy, the government has put together a £450 million, three-year Boiler Upgrade Scheme which from April 2022, will give homeowners new grants of £5,000 to install more efficient, low carbon heating systems.

The Government has also indicated that by 2026, it will decide on the potential role for hydrogen in heating buildings by learning from their ‘Hydrogen Village pilot’ in Winlaton, near Newcastle.

Heat networks are also part of the strategy, and the Heat Network Transformation Programme aims to continue to develop and grow the heat network market.

Beresford said: “The Government are correct to kickstart the heat pump industry, but it needs to consider how other solutions such as ground source, solar and wind need to be part of the mix. This will be key in generating the electricity needed for decarbonisation and means they must immediately reassess their onshore renewable approach.

“However, the most important challenge has was not cited and this the need to retrofit English and Welsh homes so that heat pumps use less energy and homes are healthier and warmer. The Government needs to engage with industries National Retrofitting Strategy and recognise, that at no cost to the taxpayer, the planning and policy elements of it will kickstart our essential retrofitting sector.”

Russell Pedley, co-founder and director of Assael Architecture, added: “Architects have long been aware of the need to design low carbon homes, and this new strategy marks a major step forward when it comes to decarbonising England’s ageing housing stock. However, with much emphasis placed on incentivising households to install heatpumps, it is unclear what this means for private renters, who make up nearly a fifth of the country’s household occupiers.

“As England’s build-to-rent sector continues to grow year on year, more attention needs to be paid to the crucial role these homes can play in meeting the Government’s decarbonisation targets while making up the shortfall in annual housing delivery. Modern methods of construction, used for many build-to-rent developments, can also help to bring in new talent from across the manufacturing sector to ensure we have the skills available to deliver a transition to low carbon housing.”