The UK scheme to encourage households to switch from gas boilers to low-carbon heating alternatives such as heat pumps is “failing to deliver”, a parliamentary committee has warned.
Under the £450mln boiler upgrade scheme, grants of £5,000 are available to support the installation of greener heating systems in domestic and small non-domestic properties, as the government targets the installation of 600,000 heat pumps per year by 2028 as part of its net-zero strategy.
Based on the current uptake rate, where only £49.7mln has been issued so far, according to Ofgem figures, only half of the allocated budget will be used, the Environment and Climate Change Committee noted as part of its inquiry into the scheme.
This slow flow of funding will also have the effect, the committee warned in a letter to the secretary of state for energy security and net zero, Lord Callanan, of failing to encourage a healthy market of installers and manufacturers in time to implement low-carbon heating policy measures smoothly.
Therefore, the government’s 2028 target is “very unlikely to be met,” it said, calling for the remainder of the budget to be rolled over into the second year and potentially extending the scheme.
Promotion of the scheme has been “inadequate”, leading to limited public awareness of low-carbon heating systems, the committee said, calling for the government to provide greater clarity for consumers and industry on the scheme and available options, as well as updating the “flawed” Energy Performance Certificates (EPC) methodology to properly reward households that make the switch.
“Misleading messages” have been issued by the government over the potential for hydrogen for home heating, though it is “not a serious option…for the short to medium-term”, the letter said, which is also negatively affecting take-up of established low-carbon home heating technologies like heat pumps.
Even with the grants, upfront costs are “too high for many households”, making it “impossible” for low-income households to benefit from the scheme.
Electricity market reform is also “urgently needed” to ensure running costs are affordable, though heat pump running costs for some users have started to become more competitive with gas boilers.
The energy and utilities trade body also recently warned that the targets for rolling out heat pumps are unrealistic, suggesting that it would require the current level of around 3,000 trained heat-pump engineers to rise to around 140,000 by 2028.
Private companies have only recently started to up their game on heat pumps, with Redrow PLC (LSE:RDW) last month becoming the first UK housebuilder to commit to installing heat pumps rather than gas boilers in new-build homes, and British Gas recently ramping up the price war with rival Octopus, which last year launched a pilot scheme with Lloyds Banking Group PLC.