Boiler manufacturers will be issued with mandatory targets to ensure that a proportion of the home heating devices they sell are heat pumps, the government has proposed.
In one of the suite of documents released on Tuesday (19 October) alongside its Net Zero Strategy, the Department for Business, Energy and Industrial Strategy set out proposals for a new market-based mechanism to support the roll out of heat pumps.
The paper said the government is likely to pursue an obligation on fossil fuel heating appliance manufacturers to achieve the sale of a certain level of heat pumps in proportion to their gas and oil boiler sales over a given period.
This proportion, which echoes the zero emission mandates on auto-manufacturers in US states such as California, could then be ratcheted up over time.
Details of the mechanism, which would include provisions for credit-trading, will be consulted on in due course.
Only heat pumps up to 45kWth fitted to existing UK properties would qualify for the manufacturers’ obligation.
The paper also said that limits would be imposed on the number or size of hybrid heat pump boilers which manufacturers could deploy to help meet their obligation.
The new mechanism is designed to kickstart the development of the UK’s heat pump supply chain, the paper explained: “Since it is clear that heat pumps will be a major part of the UK heating mix under any strategic scenario, many companies in the sector are already planning and beginning to grow the low-carbon side of their businesses in order to compete in that fast-growing market and so retain or grow overall market share.
“This market-wide policy provides the incentive and confidence to pursue and expand those plans.”
The document said an alternative option would be to apply an obligation on suppliers to install low-carbon heat installations.
But it said imposing the mandate on manufacturers has a “strong alignment” with the way the heating appliance market is developing.
Another document issued yesterday, outlining BEIS’ response to feedback received during its consultation on its proposed Clean Heat Grant scheme, said the government has increased the size of the grants available for replacing fossil fuel boilers with low-carbon alternatives.
The response said the grants for the installation and capital costs of air-source heat pumps, which will be available via the rebadged Boiler Upgrade Scheme, will be £5,000 rather than the £4,000 hand-outs proposed previously
In addition, the response said the new budget of £450 million over three years is a “significant increase” from the £100 million over two years earmarked for the scheme in the 2020 budget.
Slightly higher grants of £6,000 will be available for ground-source heat pumps to reflect their higher installation costs, while £5,000 apiece will be available for biomass boilers but only in rural areas.
Despite the increase in the boiler upgrade grants, Mike Foster, chief executive of the Energy and Utilities Alliance, said they will still be insufficient to compensate households for the higher costs of heat pumps.
He said: “The grant hardly sets the world alight and is insufficient to the scale of the challenge we face in terms of reaching net zero.
“It subsidises 30,000 heat pumps being installed each year and is well short of the support needed to get to 600,000 heat pumps installed each year by 2028. My suspicion is that the chancellor is putting the brakes on the prime minister’s flight of green fantasy.
“I suspect hydrogen-ready boiler installations will be far greater than that number by 2028, suggesting that consumers have made their choice. But that choice, between heat pumps or hydrogen-ready boilers, is one they should have.
“The £5000 grant only pays half the cost of a heat pump, so those in fuel poverty will see no warmth from the government’s generosity. Instead, it is middle-class bung for people who were probably going to fit a heat pump anyway.”