The government has been urged to introduce a ban on the installation of fossil fuel heating in all homes “no later than 2033” in a new report from the Regulatory Assistance Project and the think tank E3G.
The report drew comparison with the planned phase out of petrol and diesel cars from 2030, saying it would provide a clear signal to the heating market and spark long-term commercial investment. The government already intends to introduce a ban on the installation of fossil fuel heating in new homes from 2025 as part of its new Future Homes Standard.
The ban was one four main recommendations, which the report said would be necessary to meet the prime minister’s target of installing 600,000 heat pumps per year by 2028 – a 25-fold increase over the roughly 24,000 heat pumps fitted in 2020. It noted that the target falls short of the 900,000 yearly installations suggested by the Climate Change Committee.
The report said a Heat Pump Council comprised of national and local government, regulators, industry and civil society should also be convened this year to coordinate the process, ensuring the supply chain is developed and that consumers are aware, engaged and protected.
It said the government should also begin scaling up the financial support available to households this year, initially offering £6,000 grants to better off homeowners and £10,000 grants to low-income households. It said the grants offered to more affluent households could be scaled back over time as the market grows and the cost of heat pumps comes down, with the overall value of support peaking at up to £3 billion in 2030.
Lastly, the report said the government should adjust how much electricity costs relative to gas to reflect their true costs while protecting fuel poor households. It said this could be done by pricing the costs of carbon emissions into gas consumption, rebalancing how the cost of policies such as the Contracts for Difference scheme are levied on energy bills and pricing heat pumps into property values by linking the level of stamp duty to the energy efficiency and carbon emissions of homes. It said all of these measures should be introduced by the end of the current parliament.
The report also highlighted the importance of time-of-use tariffs to the economics of heat pumps, which it said could make them cheaper than gas boilers without subsidy when combined with some of the aforementioned measures.
The report was authored by Jan Rosenow, European programme director at the Regulatory Assistance Project; Pedro Guertler, programme leader at E3G and Richard Lowes from the University of Exeter’s Energy Policy Group.
“We can copy from the successful approach taken for accelerating adoption of electric vehicles,” said Rosenow. “Set a long-term regulatory signal for phasing out fossil fuels for heating and let the market deliver on it. Support households who install heat pumps early and those on low incomes. And make the running costs more attractive than gas boilers.”
Guertler said: “Having made the 600,000 heat pumps a year pledge in his 10-point plan and with the UK hosting crucial climate negotiations this year, the prime minister has a lot riding on his heat pumps target being credible.
“The government needs to take bold, coordinated decisions this year to stand a realistic chance of achieving a mass market by the end of this decade. While the scale and pace of transformation needed for our heating can appear daunting, it is a necessary and achievable investment in the UK’s future.”
Lowes added: “The scale of heat pump deployment needed for the UK’s net zero goal dwarfs the size of the UK’s transition to North Sea gas in the 1960s and 70s. Meeting the challenge requires a combination of public and private investment, incentives, skills development and standard setting. Hence our suggestion that a Heat Pump Council, something akin to the historically powerful but now defunct Gas Council, could have great value for the UK’s clean heating mission.”