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The Research Brief: “optimistic assumptions” are holding back heat pump progress

Your weekly dose of policy thinking.

By Spotlight

Welcome to the Research Brief, where Spotlight, the New Statesman’s policy section, brings you the pick of recent publications from the government, think tank, charity and NGO world. See more editions of the Research Brief here.

What are we talking about this week? Decarbonising Home Heating, a new report by the National Audit Office (NAO) looking at government progress on greening up the way Briton’s heat their homes. Keeping the UK’s 28m homes warm made up 18 per cent of all our greenhouse gas emissions in 2021. Cutting them down is essential to reaching net zero.

NAO who? Founded in 1983, the National Audit Office, or NAO for short, is the UK’s very own public spending watchdog. They keep an eagle eye on how the government is using taxpayer’s money and, alongside Parliament’s Public Accounts Committee, hold ministers to account over how effectively that cash is used. They regularly investigate and produce reports which look at government spending. In other words, they mark Whitehall’s homework.

Sounds like a big job. So, what has their latest report found? Despite setting some hefty, ambitious decarbonisation targets, the Department for Energy Security and Net Zero (DESNZ) has some way to go to get the ball rolling on the decarbonisation of home heating. The NAO report points out that the government’s 2021 Heat and Buildings Strategy outlines several key parameters to which the UK government is currently working on this issue.

They include growing the heat pump supply chain to a minimum of 600,000 installations per year by 2028 and developing a clear evidence base by 2026 to support future decisions on the role of hydrogen in home heating. But as the NAO point out, how DESNZ intends to reach these targets remains unclear. This is particularly the case around how hydrogen might be used to decarbonise home heating.  

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[See also: Is the UK up to speed on climate adaptation?]

Oh dear. Anything else? According to the NAO, DESNZ really needs to get to grips with the other longer-term challenges around decarbonising home heating. This includes the role of the UK’s seriously extensive gas network, and how they might help those homes that are a bit trickier to decarbonise. The report also said the government must work a bit harder to outline how it will maximise the value of public and private investment on the way to decarbonising home heating.

So, what about heat pumps? Well, the NAO said since 2021, the government’s intentions for heat pumps to become the main technology used to decarbonise the UK’s housing stock has become increasingly clear. But they add that DESNZ’s progress on encouraging actual take up has been slower than planned.

This is mainly due to the fact that the cost of installing a heat pump remains high, and public awareness of how heat pumps function and their effectiveness remains low. To fix this, the NAO has encouraged government to use a mixture of different incentives, engagement, and regulations to support a better rollout. They suggest this could all be rolled into a long-term plan to increase consumer engagement over the question of heat pumps.

The report also points out DESNZ is currently relying on what it terms “optimistic assumptions” about consumer demand and manufacturer supply of heat pumps to be able to sustainably achieve 600,000 installations per year by 2028. According to the Heat Pump Association, 55,000 heat pumps were sold in the UK in 2022. To achieve DESNZ’s 600,000 target would require an elevenfold increase from 2022-2028 and would need to use sales as proxy for installations. That’s a major increase at a time when both the public finances and consumers are struggling under the weight of recent economic turmoil.

What else do they recommend? For a start, the government must publish an updated Heat and Buildings Strategy by 2026. The NAO also recommend the government accelerates its work to “rebalance the costs of energy” by moving levies from electricity to gas bills. This will make it easier for consumers to make the switch to heat pumps as they begin to offer a cheaper, more attractive alternative to a gas boiler for heating their home.

Wow. Did the government have anything to say in response? A government spokesperson pointed out that DESNZ recently increased the grant given to consumers through the Boiler Upgrade Scheme by 50 per cent, leading to a 40 per cent uptick in applications. The spokesperson also added that almost half of all homes in England now have an energy performance certificate of C or above, up from 14 per cent in 2010. (Spotlight would point out that Rishi Sunak scrapped the mandatory requirement on homeowners to ensure their properties met the EPC C rating last year).

In a sentence? The government needs to speed up the pace of the UK’s housing decarbonisation drive, and quickly. But focusing on overly-ambitious targets might just be holding them back.

[See also: The problem with heat pumps]

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Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
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