The Heat Pump Association (HPA) welcomed a package of government announcements on 30 March 2023 covering low carbon heating, including a commitment to rebalance gas and electricity costs to speed up electrification for households and businesses1. The HPA said the announcement also included a consultation on a clean heat market mechanism, an extension of the Boiler Upgrade Scheme (BUS) until 2028, a new £30 million Heat Pump Investment Accelerator and an extension of the Home Decarbonisation Skills Training Competition1.
The clean heat market mechanism is described by the HPA as a policy aimed at supporting the development of the UK market for heat pumps through a market incentive to grow the numbers of heat pumps installed in premises each year1. The £30 million Heat Pump Investment Accelerator is intended to boost the heat pump manufacturing and supply chain1. The extension of the Home Decarbonisation Skills Training Competition provides discounts for heat pump training for installers across England1.
On the rebalancing of gas and electricity costs, the HPA said placing focus on driving down electricity bills would result in a more comparable cost difference between fossil fuel boilers and heat pumps1. The association has advocated for a long-term, predictable policy framework for home heating, recommending commitment to a fixed date for the phase out of fossil fuel boilers and for developing policy to aid the effort to reach the government's heat pump installation targets1.
"The government have released a consultation on clean heat market mechanism"
The HPA said it hopes to see a more detailed response from government to address issues laid out in the House of Lords review into BUS, and an indication as to the amount of funding available to consumers1. It also said it looks forward to working with government to reach the target of 600,000 heat pump installations per year by 20281.
| Measure | Detail as reported |
|---|---|
| Clean heat market mechanism | Consultation released; market incentive to grow heat pump installations1 |
| Boiler Upgrade Scheme | Extended until 20281 |
| Heat Pump Investment Accelerator | £30 million to boost manufacturing and supply chain1 |
| Home Decarbonisation Skills Training Competition | Extended; discounts for heat pump training for installers across England1 |
| Gas and electricity costs | To be rebalanced to speed up electrification for households and businesses1 |
Why it matters for households
The cost relationship between gas and electricity shapes what a household pays to heat a home. The HPA's position is that driving down electricity bills narrows the running cost gap between a fossil fuel boiler and a heat pump1. For a household weighing up a heat pump, that gap is central to whether the switch makes financial sense, alongside the up-front cost. The BUS extension to 2028 is intended to help the scheme take full advantage of money available to help households with the initial up-front costs of installing heat pump systems1, though the HPA notes the amount of funding available to consumers has not been indicated1. The policy costs and levies on energy bills are one of the mechanisms that determine how much of a bill goes to electricity rather than gas, and the wholesale gas and electricity prices that feed through to bills sit alongside them. For a household, the practical question is whether the running cost of heating falls relative to gas, which is what the rebalancing is intended to achieve1. The wider context is set out in energy bills and energy independence.
What happens next
The clean heat market mechanism consultation has been released1. The HPA said it hopes the government will soon publish its response to Chris Skidmore's Net Zero Review and commit to a firm end date for the sale of fossil fuel boilers1. No date has been reported for that response, and no figure has been reported for the funding available to consumers under BUS1.