The variety of warmth pump installations by December 2023 was lower than half of deliberate projections; uncertainty concerning the position of hydrogen in residence heating is hampering funding and efficient planning, a brand new Nationwide Audit Workplace (NAO) report has discovered.
Dwelling heating represents 18% of UK greenhouse gasoline emissions. Authorities sees warmth pumps as the primary know-how to decarbonise the UK’s 28 million houses over the following decade.
The federal government desires to see 600,000 warmth pumps put in per yr by 2028 – an eleven-fold enhance on 55,000 warmth pump gross sales in 20224. By 2035, authorities desires to see as much as 1.6 million warmth pumps being put in yearly.
However the unbiased public spending watchdog says the federal government’s assumptions about ranges of client demand and producer provide5 are optimistic. The federal government’s flagship Boiler Improve Scheme has additionally underperformed, putting in simply 18,900 warmth pumps between Could 2022 and December 2023. DESNZ had anticipated the scheme would ship 50,000 installations by this level.
A key situation behind lower-than-expected warmth pump uptake is their price to make use of and set up. DESNZ delayed its deliberate work to cut back operating prices, by rebalancing gasoline and electrical energy costs, for instance by shifting some levies and costs from electrical energy to gasoline payments6. The division says that worth rebalancing stays an important coverage however is difficult. Warmth pump set up prices additionally fell extra slowly than DESNZ hoped.
The NAO additionally discovered that DESNZ has no overarching long-term plan to deal with the low ranges of consciousness amongst households concerning the steps required to decarbonise residence heating.7
In response to the Boiler Improve Scheme’s underperformance, DESNZ elevated the grant out there to folks changing boilers from £5,000–£6,000 to £7,500, which has enabled some power suppliers to supply warmth pump installations beginning at £500. Functions to the scheme in January 2024 elevated by almost 40% in contrast with January 2023, although extra information is required to find out whether or not the change is sustained.
DESNZ is contemplating what position hydrogen will play in decarbonising residence heating. The division has to date indicated that it’s going to have a restricted position, however it’s going to formally take a choice in 2026.
Trials of hydrogen schemes meant to supply proof to assist the federal government’s selections have been delayed or cancelled. Stakeholders instructed the NAO ongoing uncertainty may sluggish progress by limiting the power of native authorities and trade to plan and make investments.
Elements of the gasoline community could should be decommissioned if pure gasoline is now not in use and hydrogen is confined to sure areas of the nation.8 DESNZ is working to develop its understanding of the implications for gasoline networks of decarbonising residence heating and the way decommissioning could possibly be funded.
The NAO recommends authorities considers offering extra certainty on the position of hydrogen in residence heating earlier than 2026.
To enhance its transparency and accountability on the rollout of warmth pumps, the NAO says authorities ought to report its progress yearly to Parliament.
The general public spending watchdog is recommending authorities develops an overarching long-term client engagement plan for decarbonising residence heating. And it additionally recommends that DESNZ accelerates its work to rebalance the price of power to enhance warmth pump uptake.
Gareth Davies, the pinnacle of the NAO, commented: “Government needs to engage every household to achieve its objective to decarbonise home heating as part of the transition to net zero. DESNZ’s progress in making households aware and encouraging them to switch to low-carbon alternatives has been slower than expected.”
“DESNZ must draw on its experience to date to ensure its mix of incentives, engagement and regulations addresses the barriers to progress in its current programme of work.”
You may learn the total report here.
