Opinion - The Heat and Buildings Strategy
After nearly a year of waiting, the Heat and Buildings strategy has finally been published. Dominating the week’s news cycle, the government has set out its much-anticipated plans to decarbonise heating in our homes – a key driver in the bid to achieve net zero carbon emissions targets by 2050.
What and Why?
Most of us are aware of the need to reduce carbon emissions and with the heating of our homes responsible for nearly a quarter of all UK emissions, the Heat and Buildings strategy is the result of 2 years of planning, consultations, backtracking and delay until it was published on the 19th October.
If we are to decarbonise our heating, it is clear that big changes are needed which will have a fundamental impact on our behaviour and how we live our lives. Ultimately, these changes will come at a significant financial cost. However, it is becoming increasingly clear that if we don't make these changes, the cost will be far greater.
Carbon emissions are only 14% below levels in the 1990s and have been worryingly increasing in recent years. Compared to Europe, the UK languishes at the bottom of the table when it comes to the efficiency of its housing stock. Old and inadequately insulated homes are to blame with 19m homes rated at the very bottom for energy efficiency.
The Detail
The strategy includes £3.9bn worth of funding and sets out the details of how this money will be spent, including new grants to support the replacement of gas boilers with cleaner and greener alternatives.
While £3.9bn sounds a lot, the funding falls significantly lower than the £9.2bn pledge made by the Conservative party in their 2019 electrician manifesto and comes just seven months after the scrapping of the doomed Green Homes Grant. The poorly managed 'go green' incentive scheme was taken up just 47,500 homes and cost the taxpayer in excess of £314 million.
At the heart of the Heat and Buildings strategy is a new £450m, three-year "boiler upgrade scheme". Set to launch in April 2022, this will offer homeowners grants of £5,000 when switching to an air-source heat pump or £6,000 when switching to a ground-source one.
The strategy is dominated by the government’s commitment to heat pumps and doubles down on the plan to install 600,000 heat pumps each year by 2028. According to Whitehall, this figure is the 'minimum figure required to deliver net zero' and based on current figures, looks unrealistic.
Inadequate Funding
Following the hastily scrapped Green Homes Grant, this 'new' initiative falls even shorter in ambition and funding and will only allow for the funded installation of 30,000 new heat pumps a year over the three-year term. This figure is not far off the amount of heat pumps that are already being installed, and does not come close to the 600,000 a year target, announced by the government from 2028.
2021 saw just 67,000 heat pump installations, meaning a tenfold increase is needed in just 7 years. With the limited funding being made available it is difficult to envisage where this appetite and demand for heat pumps will come from.
The £5000 grant does also not come close to covering the actual cost of a heat pump. Despite the insistence from the major players that prices will reduce, you can still expect to pay a minimum of £10,000 for a full installation. Alongside the heat pump unit, homeowners will need a tank installed in their homes, changes to pipe work and new and larger radiators. All of which could prove costly.
Electricity prices are 4 times more expensive than gas, so customers can expect to see their energy bills go up as well. Having said that, the strategy does include detail on reducing electricity levies to bring them more in line with the price of gas. If we are to move towards powering our homes with electricity this is an absolute must for affordability.
The strategy would benefit from a differentiation between low and high incomes. For many low income families the grant will not be sufficient and there should be more targeted support.
Heat Pumps – Fit for Purpose?
There is also a reasonable argument that a heat pump will not be suitable to provide adequate heating for millions of UK homes. Poor insulation, a lack of space – inside and outside the home, extra noise and the fact that a heat pump will not heat your home to the comfort levels of a gas boiler, all contribute to the risk of a heat pump being a very expensive mistake.
Boiler Ban?
The government appears to have rolled back from the click-inducing 'boiler ban' headline and instead, announced a 'confirmed ambition' to end the sale of fossil fuel boilers by 2035. This new and somewhat ambiguous language is likely to have been agreed following a public backlash with some homeowners having a genuine fear of having their boilers forcibly ripped out. A complete ban on gas boilers without adequate funding for replacements will inevitably lead to the poorest in society suffering the most and increase the already unacceptable fuel poverty statistics.
Home Insulation
The strategy maintains that 38% of carbon emissions cuts will come from measures to improve thermal performance of houses. In fact, the strategy begins by emphasising the importance of well-insulated homes and states that this needs to be addressed before the replacement of heating systems. Despite this, it is difficult to find anything wholly substantive in the strategy and certainly nothing new in terms of funding.
It is vital that investment is made to improve the fabric of our homes and even more with heat pumps being top of the agenda. Unfortunately, the strategy is vague with this commitment.
Hydrogen
Trials for heating our homes with hydrogen are underway and in an ideal world could be a cost-effective solution as a direct replacement for gas. However, the strategy simply summarises existing research initiatives and has delayed any significant decisions by a year, which is not until 2026. The strategy would benefit from higher funding for research in this area but it seems that hydrogen is not at the forefront of government plans.
There is no denying that climate change and the reduction of carbon emissions in the UK needs to be the vanguard of the government’s agenda and there are positives to be taken from the Heat and Buildings strategy.
The arguments for and against heat pumps can be discussed for days, but there can be no disagreement that adequate funding for installation and improvements in insulation is vital and as it stands, the Heat and Buildings strategy does not go far enough.