Our response to the consultation on support for low carbon heating in residential buildings

Yes. We agree with the criteria proposed to inform technology eligible for support. However, we think that there is a case to be made for having a degree of flexibility with the proposed criteria in certain circumstances.

The consultation notes that by applying the proposed criteria for technology support the department would consider providing support for the following:

• Air to Water Heat Pump
• Ground to Water Heat Pump and
• Water to Water Heat Pump

We think that an offer of financial support to install low carbon heating should be available to as many people as possible. It will therefore be important that any criteria aren’t so tightly defined that they would preclude support for some other technologies in specific cases where the above technologies weren’t appropriate for a particular property.

Air-to-air heat pumps

We also recommend the inclusion of air-to-air heat pumps on the list of technologies that the department should consider providing support for. This could be done by including air-to-air heat pumps as a separate technology within the list or by simply referring to air source heat pumps (as the term air source heat pumps technically encompasses both air-to-water heat pumps and air-to-air heat pumps).

The inclusion of air–to-air heat pumps would help to ensure that the proposed low carbon heating support scheme is able to support the installation of low carbon heating in more homes – because there are some housing types that air-to-water, ground-to-water and water-to-water heat pumps are not suitable for but that air-to-air heat pumps are (for example flats).

Air-to-air heat pumps transfer heat from the outside air to the air inside a home, increasing the air temperature in each room. This warm air enters a home through a series of fan coil units, or ‘blowers’. Air-to-air heat pumps are sometimes referred to as air conditioning.

While many people think of air conditioning as a way of cooling buildings, it can also be used for heating. Indeed, air-to-air heat pumps are a well-recognised technology that has been deployed widely across the world for cooling and also for heating purposes. Indeed, some European countries (for example Norway) have seen air to air heat pumps or other reversible heat pumps providing the bulk of their heating solutions, rather than relying on air-water or ground-water heat pump technology.

We would welcome the opportunity to provide more information to the department about air source heat pumps if it would useful and would likewise be happy to meet with the department to discuss this technology in more detail if it would be helpful.

However, we note that the inclusion of air-to-air pumps as a technology that the department would provide support for may not be consistent with the Proposed 7th criteria that an eligible installation must “…provide full space heating and hot water needs of the property year-round.” and as such there may be a need to drop this requirement in appropriate circumstances where air-to-air heat pumps are suitable but another technology will be required for water heating.

Biomass boilers

As we note in our response to question 3, we also think that the department should consider supporting biomass boilers in exceptional circumstances. This would also necessitate some flexibility with some of the proposed criteria.

Heat batteries

We also think that the department should give consideration to the inclusion of heat batteries as a technology that could be eligible for support in cases where no heat pump technologies are technically feasible. We note that prior to June 2024 the Scottish Government’s Home Energy Scotland Grant and Loan supported applications for energy storage systems, including heat batteries.

Given the role that such technologies can play in providing flexibility for the grid and the fact that the grid in many parts of rural Northern Ireland has limited capacity, the department in Northern Ireland may want to consider whether it would be appropriate for support to be provided for such systems under any new support scheme.

Yes. We think that the following criteria should also be applied:

• For technology types that are covered by MCS, we think that products and installations should be MCS certified.

If a decision is made to allow some flexibility to be applied to the criteria in exceptional circumstances so that financial support can be provided for other technologies where it is not possible to install an air to water, ground to water or water to water heat pump then specific criteria will need to be developed for the use of these other technologies.

We would welcome the opportunity to provide our thoughts on what these criteria should be if the department would find this useful.

Yes. We think that there are some limited, specific situations where financial support for biomass boilers would be appropriate. For example, rural properties where the peak heat demand cannot be met by a heat pump without upgrading the electricity supply at a disproportionate cost.

Financial support is provided for biomass under low carbon heating support schemes in other parts of the UK. The Scottish Government’s Home Energy Scotland Grant and Loan, for example, provides a £7,500 grant and up to £7,500 of loan funding for wood fuelled (biomass) boilers and eligible stoves. It is worthwhile noting though that the grant/loan does not support non-automated, non-pellet stoves or room heaters. Written evidence must also be provided as to why a heat pump and high retention storage heaters are not suitable.

The UK Government’s Boiler Upgrade Scheme which provides support for low carbon heating in England and Wales also support biomass with grants of £5,000 available towards a biomass boiler for properties off the gas grid and in rural locations and the boiler must have an emissions certificate showing that polluting emissions are kept to a minimum.

While it should be possible in almost all circumstances to install a heat pump-only system, we note that in a very small number of cases a hybrid heat pump may be the most appropriate low carbon heating solution for a property (for example where a property is on the gas network and peak heat demand cannot be met by a heat pump without upgrading the electrical supply at a disproportionate cost).

However, we also note that there is still some uncertainty about use cases for hybrid heat pumps. Given this and the department’s intention to “support technologies that offer the greatest carbon savings” we support the department’s proposal that hybrid heat pumps should not be supported as part of a low carbon heat scheme at present.

In this context, we also note that the Scottish Government is currently considering the implications for the Home Energy Scotland (HES) Grant and Loan Scheme after publication of the updated version of The Heat Pump Design Standard, which clarifies MCS requirements for a hybrid heat pump.

Yes, for:

• Air Source Heat Pump
• Ground Source Heat Pump
• Water Source Heat Pump

We agree that a minimum Seasonal Co-efficient of Performance of 2.8 should be applied to the heat pump technologies considered for support. We note that this is the approach used by the UK Government for the BUS.

No. We think that all residential buildings should be eligible for low carbon heating technology support with the following exceptions:

• Holiday homes
• Second homes

Option A – No minimum energy efficiency requirements
Option B – A valid EPC with no loft or wall insulation recommendations.
Option C – An energy assessment of the home conducted by a technical adviser.
Option D – A minimum standard of EPC rating.
Option E – Other method (please specify).

B: A valid EPC with no loft or wall insulation recommendations.

Our view is that a valid EPC with no outstanding loft or cavity wall recommendations should be a requirement to receive grant funding. We recognise that a requirement to have an EPC could be a barrier for some people as not all homes have them.

We understand that any requirement to have no outstanding recommendations for loft or cavity wall insulation on an EPC could be a barrier for some consumers. For example, people might only just be able to afford, with the grant assistance, the cost of a heat pump and not further measures in addition.

There is an argument not to require an EPC with no outstanding loft or cavity wall recommendations and to simply leave the decision up to a fully informed owner to decide if they want the loft and cavity insulation, with an installer communicating what their options are, making them aware it’s a cost-effective measure and may require a smaller heat pump.

It is our position that affordability and pace of decarbonisation are both important considerations. This means that at present, installing outstanding loft or cavity wall insulation is a necessary barrier to protect consumers so that they have efficient running costs (and therefore the affordability of energy in the home). This is a proportionate cost for consumers to face as loft and cavity wall insulation tend to be the most cost-effective types of insulation.

We believe an alternative approach could create a really challenging consumer journey, especially so when decisions are not necessarily being made based on advice from an installer but on what a consumer can afford. If a consumer chooses to go ahead without the fabric works prior to installation of a heat pump they may find the system less efficient than it would otherwise have been, be faced with higher running costs and may find it unsuited to their needs as against their expectations.

In this context we were pleased to see reference in the consultation to the department’s current work preparing a consultation on “evidence-based options for a domestic energy efficiency programme” and we would very much support the introduction of a grant programme for energy efficiency in Northern Ireland that sits alongside a grant programme for low carbon heating and wider programme of support including a One-Stop-Shop (OSS) advice service and the provision of interest-free loans to provide support for the self-funding market (i.e. what has traditionally been called the able-to-pay market).

We also note that this approach – requiring a valid EPC with no outstanding loft or cavity wall recommendations is consistent with the approach taken by the Scottish Government in their Home Energy Scotland Grant and Loan. Under this scheme if loft and cavity wall insulation are recommended in an energy report they must be installed before funding for low and zero emission heating can be claimed.

Where these measures are recommended for a property, applicants can apply for funding towards loft and cavity wall insulation under the scheme. Applicants are required to supply an EPC and the cost of this (together with the cost of a post-installation EPC) can be added to any loan funding applied for up to a maximum of £150. No grant funding is available for EPCs.

N/A

Yes. We agree that support for low carbon heating technologies is provided separately for owner-occupiers with alternative provision of support made for landlord, social housing and non-domestic properties. Having separate support schemes for different tenures allows financial support schemes to be better tailored for the specific needs of each tenure.

The consultation document suggests that support provided to household properties that are engaged in business activity or which are registered with Land and Property Services for business rates, together with the rented sector and social housing sectors would be “significantly more complex”.

We would urge the Northern Ireland Government to push forward with the development of support schemes for these sectors in addition to the owner-occupied sector and note that such support schemes have been successfully developed in other UK jurisdictions.

For example, in Scotland the private rented sector is supported with the Scottish Government funded Private Rented Sector Landlord Loan Scheme, and the social housing sector is supported by the Scottish Government’s Social Housing Net Zero Heat Fund which helps social housing landlords install zero direct emission heating systems and energy efficiency measures.

Yes. We agree that self-build properties built by individuals as opposed to companies should be eligible for support.

Homes built by self-builders (as is the case with homes built by other builders) are not currently required to be built with low carbon heating systems. Providing a support for the installation of low carbon heating systems in self-build properties is therefore likely to encourage more self-builders than would otherwise have been the case to build their property with a low carbon heating system.

Both – rural and island.

In principle, we agrees that additional financial support should be available to those homes in both rural and island areas.

As the consultation document notes rural and island areas can potentially face higher installation costs. This is for a range of reasons but includes the fact that transportation costs (both time and fuel) are often included in quotes for work – so the further an installer has to travel to do a job the larger the quote.

There is not currently a well-developed heat pump installer base in Northern Ireland and there will therefore be some areas that are a significant distance away from a heat pump installer business.

As the heat pump installer base for heat pumps grows in Northern Ireland the need for any kind of rural and island uplift should reduce. If the Northern Ireland Government supports local installers to grow with local heat pump markets much of the additional cost of installing heat pumps in rural and island areas could be avoided and rural economies could be strengthened.

If additional financial support is offered to homes in rural and island locations the need for and the level of such additional support should be regularly reviewed.

We do not have specific recommendations for how homes in Northern Ireland would be identified as rural by the department.

We note that the consultation document refers to the fact that a rural uplift is available under the Home Energy Scotland Grant and Loan which Energy Saving Trust delivers on behalf of the Scottish Government. This uplift can be claimed by those living in Remote Rural and Island areas, or off-gas Accessible Rural area (defined by the Scottish Government’s Urban Rural Classification) and Home Energy Scotland advisors are able to tell householders if they can claim this uplift or not.

Yes. We agree that to be eligible for support, a new heating installation should replace fossil fuel heating, replace direct electric heating, or be installed where no central heating currently exists.

However, we also think that the Northern Ireland Government should consider providing support for those replacing a low carbon heating system with another low carbon heating system (please see our answer to question 14 for further details).

No. Replacing a low carbon heating system with another low carbon heating system may cost more than replacing a fossil fuel system with another fossil fuel system.

If a subsidy is provided for those replacing a fossil fuel system with a low carbon heating system but not provided for those replacing a low carbon heating system with another low carbon heating system when it is coming towards the end of its life, then this could arguably be seen as a penalty for doing the ‘right thing’.

If subsidy isn’t provided for those replacing a low carbon heating system with another low carbon heating system there is also a risk that when a low carbon heating system comes to the end of its life it is replaced with a cheaper, less efficient heating system type (for example direct electric heating).

This would not be a desirable outcome – an efficient heating system like a heat pump will put considerably less demand on the grid, will offer households lower bills (when compared to a direct electric system), and – at least until the grid is powered by 100% renewable energy – will result in carbon savings.

For these reasons and given the fact that there are currently very few low carbon heating systems installed in Northern Ireland and even fewer that are likely to be in need of replacement in the immediate term we think that consideration should be given to providing support for those replacing a low carbon heating system with another low carbon heating system.

In such cases a lower level of support could be provided than that provided when replacing fossil fuel heating, replacing direct electric heating, or where an installation takes place where no central heating currently exists.

Yes. In principle we think that households who have received energy efficiency support via schemes such as NISEP or Affordable Warmth should be able to apply for additional low carbon heat support under any new low carbon heating support scheme. However, in practice the extent to which we support this will depend on the ultimate levels of support that any future scheme to support low carbon heating in residential buildings provides. This is because NISEP and Affordable Warmth are predominantly focussed on fuel poor households.

If the available grant covers full installation costs for low carbon heating systems then we would be supportive of households who have received energy efficiency support via schemes such as NISEP or Affordable Warmth being able to apply for additional low carbon heat support.

However, if the scheme does not cover full installation costs and relies on the householder making up some of the costs themselves then we would not support such households being able to apply for additional low carbon heating support under any new low carbon heating support scheme – instead we would want support to be available in the form of fully funded installations for the fuel poor available through other schemes.

Yes. All households in Northern Ireland should have access to schemes that support them to transition to low carbon heating.

Different levels of support are likely to be necessary for householders in different situation – for example as we note above, we think that those living in fuel poverty should be able to access fully funded installations while the non-fuel poor should receive subsidised installations.

No. We don’t think that there is a case to be made for providing additional support to those with older (perhaps 15+ years) fossil fuel boilers. We note that the design efficiency of older boilers is lower than that of newer boilers and that age is likely to have an impact on boiler efficiency – with efficiency reducing with age (although we note that this is something that has never actually been measured and/or quantified).

For these reasons those with older fossil fuel boilers are arguably those who are most likely to benefit financially from installing a heat pump and as such a there is already a greater financial incentive for those with older boilers to install a heat pump than there is for those with a newer (less than 15 years old) boiler.

On the basis that the use of older fossil fuel boilers will result in more carbon emissions than newer fossil fuel boilers there is a carbon saving argument for encouraging those with older fossil fuel boilers to adopt low carbon heating systems.

So, while we don’t think there is a need to provide additional financial support to those with older fossil fuel boilers we do think that there is a case to be made for providing additional encouragement to those with older fossil fuel boilers to adopt low carbon heating systems.

Yes. The extent to which additional support should be offered to the consumer where no central heating system is present in the home depends, to some extent at least, on the low carbon heating system that is most appropriate for the home.

The cost of putting in a whole new wet heating system into a property with no heating system will be considerably greater than the costs of installing a heat pump in a home that already has a wet heating system. However, installing an air-to-air heat pump system in a home with no heating system is unlikely to cost any more than installing such a system in a home that already has a heating system.

No. We think that home owners should be eligible to apply for support for their primary properties and not for any additional properties they may own (for example holiday homes or second homes). This approach would be consistent with that taken by both the UK Government and the Scottish Government.

If someone owns holiday homes which are occupied then they run a business and support should be provided under an equivalent scheme which provides support to businesses (see our response to question 9).

Yes, we agree that the department has a requirement for consumer protection measures to be associated with support for low carbon heating technology.

It will be vitally important that consumers are confident that the measures are appropriate to their home, the measures are fit for purpose and reliable, designed appropriately and installed by operatives who have the appropriate skills for their trade and who work to industry standards.

However, in addition to that, protections need to be in place should any link in the supply chain fail.

We welcome the references in the report to relevant research undertaken by the Consumer Council for NI and by Robinson, Bloomfield and Meek. In the context of consumer protections in the low carbon heating sector the department might also be interested in the following:

• As part of its current review of Ofgem’s terms of reference the UK Government’s Department of Energy Security and Net Zero is seeking views on Ofgem’s remit in enforcing consumer law in respect of low carbon technologies, such as heat pumps and solar panels, and what the appropriate boundaries might be
• Consumer Scotland – the statutory, independent body set up by the Scottish Parliament to promote consumer protection across water, energy and postal services is currently undertaking an investigation into consumer protections in the market for energy efficiency and low carbon products. While this investigation focusses solely on Scotland we note that some of the issues being considered will be common across the UK and a such the findings of the investigation, once they are published, may a useful source of information for the department as it considers appropriate consumer protections for the low carbon heating sector.
• The Competition Markets Authority’s (CMA) findings report published in May 2023 on ‘consumer protection in the green heating and insulation sector’. The findings of this work showed that consumers looking to buy low-carbon technologies can face difficulties and are not always treated fairly by businesses, concluding that the standards landscape is not working as effectively as it could. This is because it is complex and confusing for consumers to navigate, this is coupled with low consumer awareness which risks putting consumers off buying low carbon products or having negative experiences due to purchasing the wrong system for their home.
  Crucially, the CMA report also summarised necessary steps from governments across the UK, including the prioritisation of centralised information and advice services for consumers

Need for installers to be registered to a certification scheme such as MCS.

We agree that installers should be registered to a certification scheme such as MCS.

Ensuring that installers are registered to a certification scheme such as MCS will be an important part of ensuring that consumers are adequately protected in the low carbon heating market. It is however only one part of the equation and a wide range of other actions will be required – for example and as noted in our response to question 20 above and question 28 below – the provision of centralised information and advice services for customers.

Yes. We agree that funding should be made available towards certification fees if it is required for installers to be accredited to a certification scheme.

We know from our experience of delivering the Green Heat Installer Programme on behalf of the Scottish Government that this type of scheme can have a positive impact.

As the consultation notes the Scottish Government’s MCS certification fund provides qualified heating installers with a grant to pay their first-year fees to become MCS certified for heat pumps (either air, ground or water source). This grant pays 75% of the certification and consumer code fees up to a maximum of £1,000.

Over the course of 2023-24, 24 businesses utilised this fund and became MCS certified heat pump installers in Scotland.

Yes. We think that electrical work completed as part of the low carbon heating technology installation should be required to be certified by an approved accredited body.

As we note above, we think installers should be MCS certified in order to take part in any future government support and as noted in the consultation document MCS accreditation requires that electrical work completed as part of an accredited installation is carried out by electricians who can demonstrate their competencies in installing electrical renewable systems by holding a recognised electrical certification.

Yes.

No. We agree that the department should provide a one-off capital grant. However, we think that capital grants should be provided in conjunction with a low interest loan.

For many householders the up-front cost of purchasing and installing low carbon heating systems continues to be the main barrier to uptake and a low and zero interest loan offered in conjunction with a one-off capital grant could play a key role to help overcome this barrier – with the loan element enabling customers to repay the upfront cost over time, and the grant element reducing the overall intervention cost.

The consultation document notes the departments concern that if “financial support is provided by way of a low-interest loan or loan guarantee, there will be a risk to the department of unrecoverable debt, which would be difficult for budget management purposes.’ Loans, including zero interest unsecured loans, have been an integral part of the support provided by the Scottish Government to reduce emissions in homes and businesses for around 15 years which suggests unrecoverable debt has been a low risk. One reason why this risk is lower is that following the installation of energy efficiency or low carbon technology measures bills are lower than before improving affordability as well as the additional factors set out below.

As the organisation responsible for delivering the Scottish Government’s Home Energy Scotland Grant and Loan our experience has been that loan repayment rates under this scheme have been consistently high and that failed direct debit payment rates (which can be considered as payment defaults, including non-intentional causes such as card expiration) are consistently very low.

The fact that the Home Energy Scotland Grant and Loan is targeted at the able to pay market and applicants are required to pass a credit check for loan funding is likely to be a key contributor the schemes consistently high repayment rates. It is also worthwhile noting that the Home Energy Scotland Grant and Loan is supported by free, impartial customer advice provided by Home Energy Scotland. The Home Energy Scotland advice service provides customers with “one-stop shop” information about and is the gateway for access to the Home Energy Scotland Grant and Loan as well as to other available financial support (for example the Scottish Government’s national fuel poverty programme Warmer Home Scotland).

This ensures that, where eligible, customers can be referred to the most appropriate programme specific to their personal circumstances which for loans includes ensuring that any repayments are affordable. Having the Home Energy Scotland advice service as the sole referral route for the Home Energy Scotland Grant and Loan also ensures that the scheme is not mis-sold to customers.

Apply different amounts of funding per eligible technology type.

We think that the department should apply different amounts of funding per eligible technology type.

When designing a grant scheme there will always be a compromise between simplicity of the scheme and effective targeting of households. The more complex a scheme is and the more hoops’ consumers must navigate to engage, the greater the risk of people being disengaged.

There is a significant variation in the cost of updating a household’s heating system, to some extent driven by the different size of properties but also because of the extent of work which might be required in that property to make a heat pump work to higher levels of efficiency. Providing different levels of support to different property types (as for example happens in the Republic of Ireland) could provide an opportunity to engage different types of interested households in the transition whose main hesitation is upfront cost.

Whereas offering households tiered financial support depending on their income level (as per the French national retrofit scheme, Ma Prime Renov) would offer greater equity, providing greater support for those who need it most, whilst still ensuring the additional market value of demand from those on higher incomes.

Applying different amounts of funding per eligible technology type is done to a very limited extent within the Scottish Government’s Home Energy Scotland Grant and Loan and in the UK Government’s BUS. For the technologies that the consultation proposes the support scheme provides a one-off grant towards, the amount of grant provided in both Scotland and in England and Wales is the same for each of air source heat pumps, ground source heat pumps (including water source heat pumps and those on shared ground loops) – at £7,500 and a lower level of grant for a biomass boiler – at £5,000.

We think that if funding is ultimately offered for measures that cost less to install, for example, air-to-air heat pumps, then the grant level for these should be lower than for other types of heat pumps which are more expensive to install. As noted earlier we also think that the amount of grant available to those living in rural and island areas should be greater than for those living in other parts of Northern Ireland.

Yes. there are cost barriers beyond the cost of the technology that may impact on the successful rollout of low carbon heating technology support. These barriers include:

• As noted in our response to question 11, some households will face extra installation costs because they live a significant distance away from an installer. If the Northern Ireland Government supports local installers to grow with local heat pump markets much of the additional cost of installing heat pumps in rural areas could be avoided and rural economies could be strengthened.
• When heat pumps and other technologies that are powered by or can generate electricity are installed, then Northern Ireland Electricity Networks goes through a process to first of all check whether any upgrades are required to the household’s electrical load and then – if required – carry out upgrade works. This can result in installations experiencing significant additional costs and delays which can act as a barrier to installation. In relation to the costs of these works we think that there is scope for these to be socialised further as has already happened in GB (ref: Ofgem’s Access Significant Code Review decision that means that from April 2023 the costs of network reinforcement associated with installing low carbon technologies in existing buildings will normally be socialised). In this context we would like to see a decision made to socialise the costs of network reinforcement associated with installing low carbon technologies in existing buildings made in the final decision paper from the Utility Regulator and the Department for the Economy on the Connections Policy Framework in Northern Ireland.
• We also note that some costs associated with upgrading sole use assets sit with the building owner or occupant. This typically includes work to the supply cabling into the building and/or the distributor’s main fuse or cut out. This can act as an additional cost barrier to consumers.
• Recent price controls in Northern Ireland mean that those adopting low carbon heating systems (e.g. heat pumps) will see an increase in their network charges in line with their increased electricity consumption. We note that this will act as an additional cost barrier and disincentive to consumers to move to electrified heating.
• If householders are moving from gas to a heat pump, then they may face charges to disconnect from the gas network. Again, this can act as a cost barrier to consumers.
• Lack of availability of smart tariffs which can provide lower cost electricity at certain times. We note that the proposed smart meter roll out in Northern Ireland should lead to the increased availability and uptake of such tariffs.

We have a number of suggestions about how the department can ensure financial support delivers the best possible value for money, including:

Advice

Ensuring that the proposed support scheme for low carbon heating in residential buildings is introduced alongside an advice service. This would ensure that people are provided with the skills and knowledge they need to make an informed decision about the most appropriate low carbon heating solution for their homes ensuring that public funding is not spent on inappropriate solutions. Advice will also help to ensure that people do not pay too much for installations (for example by advising householders to seek 3 quotes) which in turn could reduce the amount of subsidy the department needs to provide. Advice about energy efficiency measures could also reduce (if that advice is taken up) the likelihood of over-sized heating systems being installed.

From our experience of delivering Home Energy Scotland on behalf of the Scottish Government, a One Stop Shop approach can empower households to upgrade their homes, accelerating retrofit rates and the deployment of low carbon technologies. For example, 42% of customers installed at least one energy efficiency, low carbon heat or renewable energy improvement after receiving advice from a Home Energy Scotland advisor and 42% of customers were planning to install at least one improvement over the next 12 months.

Policy developments in Europe also demonstrate the widespread acknowledgement of the importance of the One Stop Shop approach. For example, the EU Parliament has adopted the recast ‘Energy Performance of Buildings Directive’ which includes a provision for member states to facilitate the rolling out of one stop shops. Member states must now ensure one stop shops are available to support homeowners and SMEs to upgrade their buildings. Progress is already well underway in certain countries. For example, the French national retrofit scheme has advice at its core. The service has sought to make the customer journey as simple as possible and offers advice through online tools, assessments, retrofit management support and lists of accredited installers.

Requiring no outstanding loft or cavity wall insulation on an EPC before funding for a low carbon heating system can be made available

This could result in smaller (and therefore cheaper) heat pumps being installed than would otherwise be the case.

Introduce loans alongside one-off grants

One way of ensuring that financial support delivers the best possible value for money would be to introduce loans in conjunction with a one-off grant. As we note in our response to question 25 above as the organisation responsible for delivering the Scottish Government’s Home Energy Scotland Grant and Loan our experience has been that loan repayment rates under this scheme have been consistently high and that failed direct debit payment rates (which can be considered as payment defaults, including non-intentional causes such as card expiration) are consistently very low. The provision of loans is a low-risk high impact measure which makes very efficient use of government capital to upgrade homes – because the majority of capital available for loans is returned and can be used again and again

Ensure the availability of a skilled and trusted supply chain

The existence of a skilled and trusted supply chain will help to ensure the quality of low carbon heating installations. It will also help to ensure consumer confidence is built and maintained and help to protect consumers from scams and unfair trading. In turn this should reduce the number of consumer concerns, disputes and complaints that any future scheme has to deal with – ensuring that as much available resource as possible can be directed to the provision of financial support.

As we also note in our response to question 33, we a think that consideration should be given to the introduction of a dedicated supply chain support programme for Northern Ireland. This could provide similar support to that provided to the supply chain in Scotland by the Scottish Government’s Green Heat Installer Engagement Programme. Energy Saving Trust delivers this programme for the Scottish Government and would welcome the opportunity to discuss the programme and the support that it provides in more detail with the department if that would be useful.

Through the Scottish Government’s Green Heat Installer Engagement programme, which we manage on their behalf we support industry to upskill and become certified. We have toolkits – the heat pump toolkit (to encourage the heating industry to achieve MCS certification on heat pumps), and the insulation installer toolkit to encourage the construction industry to increase the quality of their work and competency through the PAS2030 and through TrustMark registration. We also deliver webinars to raise awareness of the above issues. We administer the MCS grant to support heating engineers to gain MCS certification for heat pumps.

In addition, we develop case studies so installers can learn from their peers, and the mobile heat pump training van which was delivered by Energy Saving Trust in collaboration with Energy Skills Partnership, South Lanarkshire College and heat pump manufacturer NIBE Energy Systems Ltd takes training to remote and rural areas where there is no training provision.

No. With only 10 MCS installers currently based in Northern Ireland we do not think that the supply chain is sufficiently established to cope with demand for installations of low carbon heating technologies if demand increases.

However, we know from our experience of delivering programmes in Scotland that, with the provision of the right support it is possible to grow supply chains – for further details see our response to question 31.

We have no specific evidence of after-care delays with repairs and maintenance of heat pumps due to supply chain shortages and delays that might cause someone to be without heating.

See our response to question 33.

No. If the Northern Ireland Government’s climate change targets are to be met the installation rate of such systems needs to accelerate drastically between now and 2030. Indeed, the Climate Change Committee advise that by 2030 for homes off-gas grid and 2033 for homes on-gas grid, all new heating appliance installations should be zero-carbon in Northern Ireland. By 2030 for homes off-gas grid and 2033 for homes on-gas grid, all new heating appliance installations should be zero-carbon.

These targets imply that a really very large increase in installation rates heat pumps is needed. This in turn implies that a very large increase in supply chain capacity is required. the ambitious targets for net zero programmes are not achievable with the current supply chain.

We note that even in countries where the installer base is considerably larger than in Northern Ireland – for example in England, Scotland and Wales there is acknowledgement that climate change targets are not achievable with the current supply chain.

We are pleased that the consultation picks up the issue of aftercare and repairs/maintenance. There needs to be sufficient supply chain capacity for the maintenance and repair of zero carbon heating systems as well as for their installation. People, especially those living more rurally, need to have confidence that they will be able to get repairs done quickly enough if their zero-emissions heating system breaks down.

There is thus a risk that a lack or a perceived lack of a supply chain for the maintenance and repair of zero carbon heating systems could act as a barrier to installation in the first place. When considering the supply chain capacity necessary to meet Northern Ireland’s targets it will be important that the capacity required to maintain and repair heating systems is taken into account otherwise there is a risk that the level of growth required is underestimated.

The skills for heat decarbonisation will not be driven by the market alone, and certainly not at the pace required.

Feedback that we continually receive from the supply chain through our work with them on the Scottish Government’s Green Heat Installer Programme, suggests that the most important thing that can be done to ensure that local supply chains are expanded and up-skilled is for the Scottish Government to provide them with long term certainty – in terms of what the Scottish Government plans to do and how much funding will be allocated.

The view from some suppliers is that this time period needs to be at least 5 years. With long term certainty of funding comes long term confidence to invest in training and staff. We think that this will be equally important for Northern Ireland – and that there is considerable scope for the NI Government to provide the supply chain with long term certainty. As the delivery ambition steps us there will be an on-going need to develop concrete policies that will deliver demand certainty as well as a continued need to engage with the supply chain to emphasise the Northen Ireland Government’s commitment to this agenda and the wider work it is doing to support the supply chain and to encourage consumer demand for energy efficiency and low carbon heat.

As we note in our response to question 28 we also think that consideration should be given to the introduction of a dedicated supply chain support programme for Northern Ireland. In this context we note that lessons could be learnt from the support provided to the supply chain in Scotland by the Scottish Government’s Green Heat Installer Engagement Programme. We deliver this programme for the Scottish Government and would welcome the opportunity to discuss the programme and the support that it provides in more detail with the department if that would be useful.

There are a number of other actions that can be taken to support the scaling and growth of the low carbon industry, particularly installers, to meet future demand projections of heat pump deployment targets, including but not limited to:

• Raise awareness of and enhance the appeal of working in the retrofit sector. Enhancing the sectors appeal amongst women and ethnic minority groups will be particularly important. A lack of awareness about retrofitting as a career choice is hindering the growth of the sector.
• Career roadmaps will be a key mechanism to provide a clear journey to career progression through the industry.
• Make information available to those wishing to uptrain or retrain about the available routes to their target role as well as what financial support is available to them in achieving that goal.
• Provide support to local colleges and training centres to provide training.
• Develop and promote faster routes and conversion courses for those coming into the industry from other sectors.
• Provide financial support to people whilst they reskill to help avoid the disincentive of a reduced income during the training period.
• Develop accessible pathways for young people to gain skills and employment in the retrofit sector leading to well paid, secure long-term work.

Finally, because installers based in the Republic of Ireland work in Northern Ireland and installers based in Northern Ireland work in the Republic of Ireland, we note the importance of the department working closely with the government in the Republic of Ireland on supply chain issues.