Retail market may solve heat pump affordability without policy changes

Increasing competition within the retail market may be enough to reduce the cost of heat pumps without the need for policy changes. That is according to Citizens Advice’s report which looks at the implications of transferring policy levies from electricity bills to drive the uptake of low-carbon technologies such as heat pumps. While the report advocates for policy levies to be moved from electricity bills on to general taxation, it also suggests that signs of competition within the retail market makes it “plausible that [...] consumers may be increasingly able to run heat pumps more cheaply than gas boilers even without changes to how policy costs are recovered”.