Nesta published a policy plan for decarbonising UK home heating on 19 July 2023, setting out four elements it says should be implemented immediately as a "Plan A"1. The research and innovation foundation said the report "sets out an outline policy plan for decarbonising the UK's home heating which Nesta plans to develop and expand on over the coming months"1.
The plan covers a confirmed phase-out date for fossil fuel boilers, making low-carbon heating affordable by reducing the cost of electricity relative to gas, growing the number of skilled heat pump installers, and reforming planning for electrification1. Nesta states that heating homes with gas and oil boilers produces around 14 percent of the UK's carbon emissions1.
On the phase-out, Nesta recommends that "The UK Government and devolved governments should confirm a 2035 (or earlier) phase-out date for fossil fuel boilers"1. It identifies reaching up to 1.7 million low-carbon heating systems installed each year by 2035 as the most important target, or sooner if the boiler phase-out date is earlier than 20351. The UK is currently installing around 60,000 heat pumps per year, many of these in new homes1.
On running costs, Nesta recommends a cap on the electricity-to-gas price ratio, ideally so that electricity never costs more than 2.5 times more per unit than gas1. It states this would reduce heat pump running costs by £110 a year for a typical home1. On subsidies, it says the UK Government should significantly increase the number of low-carbon heating subsidies available in England and Wales from the current 30,000 per year1.
On the workforce, Nesta estimates there are currently around 3,000 to 4,000 heat pump engineers in the UK, and projects that the number of installers will need to grow by 4,000 to 6,000 every year until 20351. It recommends a target of at least 6,000 people per year getting level three vocational qualifications in low-carbon heating from 2028 onwards1.
"The UK Government and devolved governments should confirm a 2035 (or earlier) phase-out date for fossil fuel boilers"
On costs, Nesta cites UK Finance estimates that getting all UK homes to EPC "C" would cost £250 billion in total, an average of £16,000 per home that needs upgrading, and that delivering this between 2025 and 2030 would cost around £42 billion per year from public and private sources1. It states that installing an air source heat pump typically costs over £10,000, compared to £2,000 to £4,000 for a typical gas boiler1. Nesta also reports that up to 38% of homeowners would choose a heat pump to replace a gas boiler even at this early stage in their development, equivalent to almost 400,000 heat pump installations per year, around ten times the current rate1.
| Measure | Figure given |
|---|---|
| Current heat pump installations | around 60,000 per year1 |
| Target installations by 2035 | up to 1.7 million per year1 |
| Current heat pump engineers | around 3,000 to 4,0001 |
| Installer growth needed | 4,000 to 6,000 per year to 20351 |
| Current subsidies in England and Wales | 30,000 per year1 |
| Air source heat pump cost | over £10,0001 |
| Typical gas boiler cost | £2,000 to £4,0001 |
Why it matters for households
The plan addresses the practical barriers that determine whether a household can move away from a gas or oil boiler. The gap between the purchase price of a heat pump and a gas boiler, and the running cost difference between electricity and gas, are the two figures Nesta puts at the centre of its affordability case1. Its proposed cap on the electricity-to-gas price ratio is aimed at the running cost side, which it estimates at £110 a year for a typical home1. The subsidy recommendation concerns the upfront side, and Nesta notes the current level of support in England and Wales stands at 30,000 per year1.
For a home's energy independence, the plan's framing is that continued reliance on gas boilers leaves households exposed to imported gas, and that the slow uptake of low-carbon heating risks both missing net-zero targets and leaving households overly reliant on imported gas for heating1. The installer figures point to a constraint on the supply side: even where a household wants a heat pump, the number of engineers able to fit one is estimated at around 3,000 to 4,000, against a projected need to add 4,000 to 6,000 every year until 20351. The planning element concerns whether a home is permitted to install low-carbon technologies at all, with Nesta recommending that all homes be permitted to do so by the planning system1.
What happens next
Nesta states it plans to develop and expand on the outline policy plan over the coming months1. The report also sets out further work, including additional policy levers that could be deployed if uptake fails to accelerate, such as mandatory installation targets for energy retail companies, larger subsidies and energy cost guarantees, and an Energy Service Company-style model for selling heat and energy together1. It also lists a more planned approach as an alternative, including heat zoning, street-by-street transitions and public entities responsible for meeting heat decarbonisation targets1. No dates for these further stages have been reported1.
Sources1 cited
- A policy plan for decarbonising home heating | Nesta, nesta.org.uk