The variety of warmth pump installations by December 2023 was lower than half of deliberate projections; uncertainty concerning the function of hydrogen in dwelling heating is hampering funding and efficient planning, a brand new Nationwide Audit Workplace (NAO) report has discovered.
Residence heating represents 18% of UK greenhouse gasoline emissions. Authorities sees warmth pumps as the primary expertise 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 improve 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 impartial public spending watchdog says the federal government’s assumptions about ranges of shopper 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 Might 2022 and December 2023. DESNZ had anticipated the scheme would ship 50,000 installations by this level.
A key challenge 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 working 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 value 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 dwelling heating.7
In response to the Boiler Improve Scheme’s underperformance, DESNZ elevated the grant obtainable to individuals changing boilers from £5,000–£6,000 to £7,500, which has enabled some vitality suppliers to supply warmth pump installations beginning at £500. Functions to the scheme in January 2024 elevated by practically 40% in contrast with January 2023, although extra knowledge is required to find out whether or not the change is sustained.
DESNZ is contemplating what function hydrogen will play in decarbonising dwelling heating. The division has to date indicated that it’s going to have a restricted function, however it’ll formally take a call in 2026.
Trials of hydrogen schemes meant to offer proof to assist the federal government’s choices have been delayed or cancelled. Stakeholders informed the NAO ongoing uncertainty might gradual progress by limiting the flexibility of native authorities and business to plan and make investments.
Elements of the gasoline community could have to be decommissioned if pure gasoline is 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 dwelling heating and the way decommissioning might be funded.
The NAO recommends authorities considers offering extra certainty on the function of hydrogen in dwelling 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 shopper engagement plan for decarbonising dwelling heating. And it additionally recommends that DESNZ accelerates its work to rebalance the price of vitality to enhance warmth pump uptake.
Gareth Davies, the top of the NAO, commented: “Authorities wants to interact each family to realize its goal to decarbonise dwelling heating as a part of the transition to internet zero. DESNZ’s progress in making households conscious and inspiring them to change to low-carbon options has been slower than anticipated.”
“DESNZ should draw on its expertise so far to make sure its mixture of incentives, engagement and laws addresses the boundaries to progress in its present programme of labor.”
You’ll be able to learn the complete report right here.
