The Business, Energy and Industrial Strategy Committee published its report on decarbonising heat in homes on 3 February 2022, concluding that the Government is not on track to meet its own targets and that more urgent changes are required1. The report followed a nine-month inquiry and the Government has two months to respond1.
The committee set out the scale of the task. According to the Climate Change Committee, 29 million existing homes need to be upgraded to low carbon heating systems by 2050, and only 15% of housing has been built since 19901. The CCC estimates that about £250 billion of investment will be needed to fully decarbonise homes by 2050, equivalent to about £9 billion each year from the late 2020s to 2050, with the total cost of heat decarbonisation in each home averaging under £10,0001. The committee said the Boiler Upgrade Scheme announced in the October 2021 Heat and Buildings Strategy would help households with the costs of some low carbon technologies, such as air source heat pumps and biomass boilers, but that the scheme is not of the scale required to meet the Government's targets1. It also said the strategy failed to provide sufficient policy detail or clarity on delivery1.
The report identified gaps in regulation, including how implementing the Future Homes Standard in 2025 will require homes built between now and 2025 to be upgraded to low carbon heating systems with additional and unnecessary associated costs1. It said heat pump markets and supply chains must be scaled up to meet the target of 600,000 heat pumps a year by 2028, and that consumer awareness was extremely limited1. It expected heating in UK homes to be decarbonised by one of three technologies, heat pumps, hydrogen and/or heat networks, alongside insulation upgrades1.
"The Government should work with industry, consumers, and affected workers to produce an effective road map detailing how the transition to low carbon heating will take place"
Energy UK, responding on 9 February 2022, said the report diagnosed over a decade of policy failure and called for a long-term, urgent and coherent policy response, a heat road map2. It said there are significant policy voids for homes, notably finance, heat networks and able to pay households, and that heating homes are the emissions-equivalent of petrol and diesel cars2. It also said that had the previous supplier-led programme of insulating lofts and cavity walls continued at the 2012 rate, when 1.6 million lofts were filled, all 15 million homes needing basic measures would have been done by now2.
The report was published the day after Ofgem raised its cap on bills to £1,971, a 54% rise from April, and the day before the Chancellor set out support measures including a £200 discount on domestic energy bills from October, repaid in annual £40 instalments over five years, and a £150 council tax rebate for 80% of homes in England from April3. The Resolution Foundation said cases of fuel stress, where energy bills exceed 10% of disposable income, would double to 5 million in April despite those steps3.
Why it matters for households
The report puts a figure on the change it says is coming to the way homes are heated: an average of under £10,000 per home for low carbon heating and retrofit combined, against a national bill of about £250 billion by 20501. For a household, that is the practical shape of home heating and energy independence: the choice of system, the cost of the upgrade and the insulation work that goes with it. The committee's finding that consumer awareness was extremely limited, and that the Heat and Buildings Strategy did not set out how awareness would be raised, means the information households would need to plan has not been set out1. Energy UK's comparison with electric vehicles, where 1 in every 5 new cars sold in December were battery-electric, points to the policy framework rather than the technology as the constraint2. The report also notes that the suitability of heat pumps, hydrogen or heat networks depends on regional geography, house type, current heating systems and whether a home is on the gas grid1.
What happens next
The Government has two months to respond to the report1. The committee recommended a road map produced with industry, consumers, affected workers and local government; a heat decarbonisation sector deal to scale up the heat pump market; a low carbon heating apprenticeship programme; and a public awareness campaign with energy companies1. Energy UK said it had submitted a response to the proposal to drive up heat pump deployment and drive down costs through a mandate on heating manufacturers2.
Sources3 cited
- Decarbonising heat in homes - Business, Energy and Industrial Strategy Committee, publications.parliament.uk
- ‘A roadmap for heat'? - Energy UK, energy-uk.org.uk
- UK’s Sunak reveals £9bn plan to offset energy hike - Carbon Brief, carbonbrief.org