Both the government and the opposition have set out how they intend to progress decarbonising the UK’s energy system, including how we heat our homes and businesses. The Conservatives rowed back the 2026 boiler ban for off-grid homes (those not connected to the gas grid). The party’s reasoning was the high cost this could have imposed on some households, particularly during a cost-of-living crisis. The Labour Party has also reined back its commitment to spend £28bn a year on green investment as it seeks to convince the electorate of its fiscal responsibility.
Both parties remain committed to reaching net zero by 2050. Both recognise that achieving this will happen within a constrained funding envelope, and that a large proportion of the burden will fall on household budgets and businesses.
A key challenge remains finding solutions that are acceptable and affordable to the public without too much disruption or cost to ordinary families and businesses. We welcomed the government’s decision last September to drop plans to ban the replacement of oil and gas boilers in rural, off-gas-grid homes from 2026, instead aligning this with plans to ban fossil-fuel boilers in homes on the gas grid by 2035. Many rural MPs were persuasive in exposing the difficulty some of their constituents would face if this unfair “rural-first” boiler ban had gone ahead as originally planned without sufficient financial support.
The National Audit Office (NAO) said the Prime Minister’s assessment that up to 20 per cent of all homes won’t be suitable for heat pumps needs greater clarity. It is likely that a large proportion of these homes will be hard-to-treat rural homes, require high heat-demand solutions and may be unsuitable for heat pumps. Low carbon, high heat-demand solutions, including standalone boilers running green gas or hybrid heat pumps (that use existing gas boilers), are not supported by existing grants such as the Boiler Upgrade Scheme (BUS), which offers funding towards the cost of a heat pump. The government position on hybrids seems increasingly untenable following Energy Systems Catapult’s report, Innovating to Net Zero 2024, which identified that hybrid heating systems could reduce total energy system costs by 7 per cent (£200bn) compared to heating systems without hybrids.
Labour must also recognise the need for heat pump alternatives in addition to its plans to green the grid and insulate five million homes by 2030. A significant number of rural properties may not be reached by grid and energy efficiency upgrades, due to high costs. The incoming government of any party should also support alternative low carbon solutions, including renewable liquid gases (RLGs) that will help rural homes and businesses to decarbonise without a high upfront cost.
RLGs can be a direct, drop-in replacement for conventional liquid petroleum gas (often known simply as “Calor gas”) and can be used either in standalone boilers or in combination with a heat pump in a hybrid heating system. According to Liquid Gas UK, a typical pre-1918 detached home would face 40 per cent higher costs from a heat pump from now to 2050 rather than from switching onto Calor gas. We have access to an innovation and research and development (R&D) pipeline, run by our parent company, SHV Holdings. We have used it to bring these new fuels to the market, but we need greater policy clarity to make these investments.
A future government should support a mixed-technology approach to clean heat and recognise other low-carbon heating solutions available for homes unsuitable for heat pumps. The latest statistics show the average cost of installing an air source heat pump via BUS is £13,333. But this does not include the energy efficiency retrofit sometimes needed for the heat pump to run efficiently in these homes. Our evidence shows that with a retrofit, the installation cost could be as high as £31,000 for a typical rural off-grid property. The BUS grant of £7,500 only covers a small part of this, with households expected to pay the difference. The NAO also found the cost of heat pump installation has not fallen as rapidly as the government had previously predicted.
A simple solution for an incoming government would be to tweak existing support programmes such as the BUS to include other low-carbon technologies. It seems inconsistent that the scheme allows consumers to upgrade to a biomass boiler but not a hybrid heat pump. Biomass boilers burn wood pellets, which can have a negative impact on rural air quality. A hybrid heat pump is also lower-carbon and has much lower particulate emissions. The Scottish government already provides grant and low-interest loans that include hybrid heat pumps via its Home Energy Scotland Scheme.
We welcome the Labour Party’s focus on insulation: improving the fabric efficiency of our buildings is the most efficient way to reduce our total energy demand, reduce consumer bills and reduce our emissions. The current Labour proposal to insulate five million homes by 2030 should target those most in need, including rural and low-income households, not just those in towns and cities. An incoming Labour government should also make the necessary reforms to the Energy Performance Certificates (EPCs) and recognise RLGs in the new Home Energy Model that will replace the current way the energy performance of our buildings is measured.
Whatever the election outcome, a new government should take a holistic, inclusive approach to decarbonising home heating. A fair transition to net zero shouldn’t mandate a certain technology; it should acknowledge the evidence that shows varying property types require a range of approaches and should support all low-carbon technologies. As we move towards net zero, we need government policy to support low-carbon heating solutions which are suitable for every home.
This article first appeared in a Spotlight print report on Sustainability, published on 10 May 2024. Read it in full here.
Related
