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Report 4 November 2020

Consultation response to BEIS committee inquiry into heat pumps

This was our submission to a Westminster parliamentary committee inquiry into the action that could be taken to scale-up the supply of heat pumps by 2030.

Past policy initiatives show that demand-led schemes (where consumers take up changes based on incentives), will not deliver the transformational change required to roll out low carbon heating to 29 million homes in less than 30 years. Government intervention will therefore be required here.

Since the Sixth Carbon Budget modelling indicates that the total cost of upgrading homes will be less than the cumulative energy bill savings by 2050,  we recommend that government consider, as a stimulus measure, setting up a long-term loan scheme to help households with the upfront cost of heat pumps. If loans were very low-interest with a ‘shared-savings’ approach to loan repayments, this would enable homeowners to upgrade their heating with no / little upfront cost and lower energy bills.[1]

While the necessary scale-up rate for heat pumps will be challenging, the right combination of regulation, impartial advice for householders and attractive customer propositions (such as no upfront cost and lower bills) would drive sufficient change.

[1] The exception here would be where customers opted to ‘spend’ all or part of their bill ‘saving’ on heating their home for longer.

Last updated: 4 March 2021