One-Third of UK Funding for Heat Pumps Unspent

The UK government pledged £6.6 billion to be spent on home insulation and the installation of heat pumps between 2020 and 2025. Unfortunately, £2.1 billion remains unspent, which caused plenty of criticism as it shows a lack of effective policies from the government but, more importantly, leaves many households in England and Wales (The countries targeted by the policy) exposed to the high energy bills and high cost of living.

Several studies and reports show that insulating homes and switching from gas to heat pumps will provide homes with significant financial savings. This, in turn, helps cushion them against the rising energy costs, especially as the UK seeks to cut its dependency on Russia’s natural gas. On top of that, the push will count towards helping the UK attain its net zero carbon emissions. Heating in UK homes currently accounts for about 17 % of the country’s greenhouse gas emissions.

As part of the efforts to hit its targets, the government aims to install about 600,000 low-carbon heat pumps yearly over five years. It is why the Boiler Upgrade Scheme was introduced, which provides households with £5000 grants to help them switch from gas boilers to heat pumps that have low carbon emissions.

Unfortunately, few people are taking up the grants, and presently only 50,000 low-carbon heat pumps are installed annually.

How can the government boost the uptake of the grants and spend the allocated amount?

Having over a third of a budgeted expenditure left unspent is a worrying sign pointing to a need for a cohesive policy and work plan. The clear thing is that few people are taking the grants hence why there is still a significant amount unspent. Unfortunately, it also means the UK’s climate change goals lag behind, and more people are affected by the high living costs.

There are also fears that the unspent sums will return to the treasury instead of being rolled forward. Considering other similar initiatives have been cancelled in the last decade, there is a need to ensure this is a success to send the right message.

The government can achieve this by implementing the following actions;

Build Awareness

The Chair of the Lords Climate Change Committee criticized the government for not doing enough to raise awareness of the scheme. She pointed out that a lack of awareness prevents the public from having confidence in the project and that the government could do better to market the scheme.

And she is correct since the government’s survey found that 80% of people in the UK had no idea what a heat pump was, let alone being aware of a grants scheme for their installation. As such, much of the public is unaware of the need to make the switch, including the benefits they stand to gain.

They are also unaware of a program to help them cover the costs of making the switch. Proper awareness campaigns will have a significant impact on boosting the uptake of the grants.

Cost

The upfront cost of heat pumps is higher than that of heat boilers. Even with the current grant amount of £5000, users will still pay about £6000 -£8500 for a complete installation. Such amounts are still prohibitive for low-income households, and the government is encouraged to increase the grant amounts.

Alternatively, it can sponsor low-cost loans or green financing, as is being used in Scotland to great success. In countries like Germany and France, the government offers higher grants of up to £9700 to make the heat pumps affordable to low-income houses that bear the brunt of high energy costs.

Number of installers

Closely related to the issue of awareness is the need for more registered heat pump installers. That means the service is expensive, and consumers risk engaging the services of unqualified technicians or lack various options. There are only 3,000 registered heat pump installers in the UK, a considerably low number, especially when contrasted to the 130,000 gas heating engineers.

The low numbers do not give consumers the benefits of a competitive market, and it also means they often have to go further to get expert advice on heat installers. This, along with the extra effort to find an installer, discourages consumers aware of the heat pumps from making the switch.

Improved consistency in government programs

As earlier pointed out, the government has launched several green energy schemes only to both their implementation and abandon them. Industry insiders say this state of affairs removes certainty in the green homes and energy sector. As such, engineers do not see the worth in retraining for new skills, and businesses do not see the need to invest in supply chains and training as well as marketing.

If the government becomes consistent, in this case, ensures the Boiler Upgrade scheme continues and is expanded, then related businesses and technicians will invest their resources and boost growth in the sector, aiding the switch to heat pumps.

What are heat pumps?

Heat pumps transfer heat from one location to another using a small amount of energy. They are commonly used to heat and cool homes and other buildings and heat water.

Heat pumps work by moving heat from a source at a lower temperature, amplifying it, and then transferring it to necessary locations.  A refrigeration cycle is used to accomplish this, which involves compressing and expanding a refrigerant fluid to transfer heat.

The heat pump absorbs heat from the outside air, ground, or water and transfers it to the indoor air when in heating mode. The heat pump absorbs heat from the indoor air and transfers it outside when in cooling mode.

Heat pumps beat traditional heating and cooling systems at efficiency because they do not produce heat but transfer it from one location to another. This means that for every unit of energy consumed by the heat pump, multiple heat units can be transferred from one area to another. This can lead to substantial energy savings, which lower utility bills.

Types of heat pumps

Heat pumps come in various types, each suited for different applications and climates. Here are the different types of heat pumps:

1. Air-source heat pumps: This type of heat pump extracts heat from the outdoor air and transfers it inside for heating or outside for cooling. They are the most common type of heat pump and are suitable for moderate climates.

2. Ground-source heat pumps: Also known as geothermal heat pumps, they extract heat from the ground and transfer it inside for heating or outside for cooling. They are more efficient than air-source heat pumps and are suitable for colder climates.

3. Water-source heat pumps: They extract heat from a water source, such as a lake or river, and transfer it inside for heating or outside for cooling. They are efficient but require access to a nearby water source.

4. Hybrid heat pumps: These heat pumps combine a traditional furnace or boiler with an air-source heat pump, providing efficient heating in cold climates and energy-efficient cooling in warm climates.

5. Absorption heat pumps: They use heat as the energy source instead of electricity, making them a suitable option for locations with limited access to electricity. They are commonly used in industrial and commercial applications.

6. Ductless mini-split heat pumps: These heat pumps consist of an outdoor unit and one or more indoor units that can be mounted on the wall or ceiling. They are suitable for heating or cooling specific areas and are often used in homes without ductwork.

Heat pumps vs. gas boilers

While both heat pumps and gas boilers can effectively provide warmth, there are significant differences in their efficiency and environmental impact.

Energy boilers use fossil fuels such as natural gas, oil, or propane to generate heat. This combustion process produces carbon dioxide and other greenhouse gases, contributing to climate change. In contrast, heat pumps use electricity to transfer heat, making them a cleaner and more sustainable option.

Heat pumps are also more efficient than energy boilers. While energy boilers can only produce one unit of heat for every unit of fuel consumed, heat pumps can produce up to three units of heat for every unit of electricity used. This means that heat pumps require less energy to provide the same amount of heat as an energy boiler, resulting in lower energy bills.

Another advantage of heat pumps is their versatility. They can be used for both heating and cooling, making them a year-round solution for temperature control. In addition, some heat pumps can be used to heat water, further reducing the need for energy from traditional sources.

While heat pumps may have a higher upfront cost compared to energy boilers, they typically have a longer lifespan and require less maintenance. In addition, many governments offer incentives and rebates to encourage the adoption of renewable heating systems, making heat pumps a more financially attractive option in the long run.

Conclusion

Switching to heat pumps offers an effective solution to help the UK manage rising energy costs and meet its greenhouse gas emission target. Heat pumps are energy efficient and also do not emit greenhouse gases.

However, the current implementation of the heat pump funding means both these targets will not be attained if the government does not change its rollout plan. Increasing awareness about heat pumps and the funding scheme and increasing the amount of funding are some of the actions which will boost uptake.