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Poorer households should have heat pump costs covered, group urges

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A coalition of charities and businesses has called on the government to offer upfront grants to low-income households to cover the cost of installing low-carbon heat pumps and help transition away from fossil fuel-based heating.

The coalition is made up of more than 20 companies (including energy suppliers) and environmental and anti-poverty groups. They have proposed a “fair heat deal” by the government to help make the transition from gas boilers easier and fairer.

While a heat pump – which effectively works like a refrigerator running in reverse – can significantly lower heating bills, the upfront cost of having one installed prevents many households from transitioning. A single heat pump costs approximately £10,000.

The coalition of groups say that, alongside energy efficiency measures to cut overall demand for heating, the switch from fossil fuel-powered boilers to heat pumps will have the largest role to play in cutting emissions from the sector in the next decade. 23 per cent of greenhouse gas emissions come from buildings.

It proposes offering grants that cover the full cost of heat pumps and insulation for low-income households, while for other people the grants should be offered at a level which makes it the same as replacing a conventional gas boiler. However, the high cost of a heat pump is expected to fall as the emerging technology is scaled up; the supporters of the fair heat deal said the subsidies could be reduced as prices drop.

The group made a number of other recommendations to reduce carbon emissions from domestic heating. It wants to see lower running costs for the efficient heat pumps compared to gas boilers, by removing environmental levies from electricity bills, while protecting those at risk of fuel poverty. It suggested introducing incentives to make green choices when it comes to domestic heating systems, such as a lower stamp duty for buyers of low-carbon, energy efficient homes and zero VAT on green products and works.

It also said that the fair heat deal should involve a new “warm homes agency” to oversee programmes and give impartial energy advice, while supporting thousands of jobs through skills and training.

Juliet Phillips, a policy advisor at climate think tank E3G said: “Moving from a gas boiler to a heat pump is one of the biggest carbon savings a household can make to fight climate change, but it must be affordable and we urge the Government to support our fair heat deal to ensure no one is left behind in the green industrial revolution.”

Energy Saving Trust CEO Mike Thornton said heat pumps are an important low-carbon heating technology that will help the UK meet its goal to cut climate emissions to net zero by 2050: “A fair heat deal will make heat pumps more attractive to householders and help them to switch over to low-carbon heating.”

A spokesperson for the government said that further details of the government’s approach to domestic heating will be provided in the Heat and Buildings Strategy. “We are supporting lower income households and vulnerable people to make homes greener and cut energy bills and will continue to do so through schemes such as the Home Upgrade Grant and the new Clean Heat Grant from April next year,” they said.

The government plans a ban on installations of conventional gas boilers in new-build properties from 2025, in an effort to accelerate decarbonisation in line with its target of net-zero emissions by 2050. However, green campaigners had hoped the new rules might be implemented earlier, and were disappointed when the Prime Minister rolled back commitments to ban gas boilers for new homes by 2023.

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