NAO raises red flag over low heat pump uptake

Domestic heating accounts for 18 per cent of the UK’s greenhouse gas emissions, and heat pumps are widely recognised as the best solution to decarbonise the country’s 28 million homes. However, the government’s flagship Boiler Upgrade Scheme – which offers £7,500 towards replacing fossil-based heating with heat pumps – has so far failed to deliver on the government’s targets.

In a new report, the NAO details how the number of heat pump installations in December 2023 was less than half of planned projections. Between May 2022 and December 2023, just 18,900 heat pumps were installed under the scheme. According to the NAO, the Department for Energy Security and Net Zero (DESNZ) had predicted the scheme to have delivered 50,000 installations by that point.

“Government needs to engage every household to achieve its objective to decarbonise home heating as part of the transition to net zero,” said Gareth Davies, head of the NAO. “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.”

The report details some of those barriers holding back the heat pump roll out, with cost a key issue. Despite the recent increase in the Boiler Upgrade Scheme from £5,000 to £7,500, installation costs for some are still prohibitively high. Furthermore, DESNZ has delayed its planned move to reduce heat pump running costs by rebalancing gas and electricity prices.  

The NAO also says that DESNZ has no overarching long-term plan to address the low levels of awareness among households around the steps needed to decarbonise their homes. Another area of concern is the continued uncertainty over the role of hydrogen in home heating. In October 2023, the National Infrastructure Committee called on the government to rule out hydrogen for domestic heating. However, DESNZ said it will not make a final decision on hydrogen in the home until 2026, something the NAO and others believe is hindering heat pump progress.

According to Juliet Phillips, UK energy programme lead at climate change think tank E3G, the fossil fuel lobby has played a role in these delays.

“Heat pumps are the clean tech solution to reduce the UK’s dependence on fossil gas imports, cut energy bills and meet legally binding carbon targets,” said Phillips.

“However, a concerted campaign by the fossil gas lobby and climate sceptic commentariat has been fairly successful at killing off policy ambition. The UK desperately needs political leaders who will stand up to vested interests and support British households and manufacturers to transition towards clean heat solutions.

“The good news is that many of the policy solutions are ready to go. Removing the taxes which disproportionately sit on electricity bills – artificially inflating the running costs of a heat pump – is one such idea waiting in the wings. The government can also move with speed to lay long-term regulations for the clean heat market mechanism, rule out hydrogen for heating, and ensure all new homes are built with heat pumps as standard. The longer these decisions are delayed, the longer the UK remains hooked on expensive, fossil gas imports.”