What Does the Heat and Buildings Strategy Mean for the Heat Pump Industry?

Written by Phil Hurley, Chair of the Heat Pump Association

And there we have it. After multiple delays and heightened anticipation, the Heat and Buildings Strategy is finally out there and open to speculation. It’s fair to say that we’ve seen plenty of the latter, with many calling out the Government for publishing a ‘watered down’ strategy, whilst others have welcomed it as a great start.

The Importance of Perspective

This mixed response is predictable when it comes to the publication of proposals, largely because it depends on what they’re being measured against.  Those taking a relative outlook and considering what came before the Strategy will of course perceive it as significant progress, whereas those looking at the bigger picture – the ‘absolute’- will question whether it is enough to meet net zero and determine that it is not.

But the reality is that both measures are important.

While there is every reason to keep our eyes on the final goal, we should also be able to recognise the progress made along the way. Taking a relative outlook, the Heat Pump Association has warmly welcomed the release of the Strategy as a key milestone that will help to strengthen the already growing heat pump market.

But what tangible changes can the heat pump industry expect to see from here on in?

A Confidence Boost for Industry and Consumers

Providing a clear sign that heat pumps are the current heating system of choice for decarbonisation, the Government has indicated that the 600,000 target of deployment by 2028 per year is a minimum, regardless of any future decisions to be made on hydrogen.

It is clearer than ever that heat pumps are here to stay, with the technology being a key focus of the Strategy and many of the stories that flooded the national news. This will not only provide households across the country with more knowledge of the technology that could soon be heating their homes but also instil certainty in the industry that the fossil fuel era is indeed coming to an end. Regulation is vital for instilling this confidence, and the commitment to phase out fossil fuel systems in off grid homes, where heat pumps are more cost-effective, by 2026 will be a big boost to the market.  

Boiler Upgrade Scheme to ‘Kickstart’ the Market

With signs this year that heat pump sales could double those seen before, confirmation that a three-year £450 million ‘Boiler Upgrade Scheme’ will be launched in April 2022 will propel growth even further by providing upfront grant vouchers to homeowners for their installation.

Earlier consultations on the scheme, previously dubbed the Clean Heat Grant, had initially proposed to deliver vouchers of £4,000 over a period of two years rather than three, with a smaller funding pot of £100 million over a two-year scheme. In line with HPA recommendations, the increased funding pot will now see vouchers of £5,000 for air source heat pumps, and £6,000 for ground source.

With the funding projected to result in the installation of 90,000 heat pumps over three years, many have criticised the Government for unveiling a scheme that undermines its own 600,000 deployment target. However, there is hope across industry that the shortfall in funding will be addressed through other schemes, including: Energy Company Obligation 4, Social Housing Decarbonisation Fund, Public Sector Decarbonisation Fund, Green Heat Networks Fund, Home Upgrades Grant, and the Heat Pump Innovation Fund. There are also initial proposals for a ‘market-mechanism’ to place an obligation of boiler manufacturers to sell a certain proportion of heat pumps to fill this gap. This will be of key debate and conversation across the industry in the coming months.

The Government has also stated its ambitions for a 30-fold increase in the number of heat pumps being manufactured and sold within the UK by 2028 to increase the rate of installation, grow exports, and create more than 10,000 manufacturing-related jobs.

New Homes to Be Fit for the Future from 2025

With new builds being key to the growth of the heat pump market initially, the Strategy has also provided huge promise to industry by confirming that the Future Homes Standard will be introduced by 2025, with interim uplift standards coming into effect in June 2022. This will help to ensure that the record number of homes being built across the country are constructed with the low carbon future at the forefront, thus avoiding unnecessary retrofits later down the line.

Certainty for Installers

Although it was hoped that the Strategy would go further to address the much-needed support in regard to upskilling, the HPA is hopeful that the support for heat pumps will inspire installers to adapt to the low carbon transition. New training courses being offered by members of the Heat Pump Association have already demonstrated the capacity to train up to 40,000 installers per year at various training centres across the country as part of plans to support installers on their net zero journeys.

To make sure these training places are filled, it is hoped that the Government will consider recommendations made by the HPA for vouchers to support and incentivise installers gaining heat pump qualifications. There is an opportunity to ensure that installers have the skills to both install and recommend low temperature heating systems by making a Low Temperature Heating qualification mandatory for all heating installers.

Looking at the Bigger Picture

In short, the Heat and Buildings Strategy has got us off to a great start. Further progress will still be needed to ensure that government ambitions are met and that UK homes are decarbonised in line with climate targets. But there is hope that we will get there through strategic collaboration between industry and government. There is already proof that the Government is listening with open ears, with the HPA being mentioned 11 times in the Heat and Buildings Strategy. We look forward to continuing to work together to ensure that households across the country can access and enjoy the benefits of reliable low carbon heating that stands the test of time.

[Originally published in Heat Pumps Today]