The UK’s climate change watchdog has set a target for half of all homes in the UK to have a heat pump by 2040. At present, roughly 1% of UK homes are heated by a heat pump, so it appears significant Government intervention is needed if we are to get anywhere near that target writes Mark Greatholder, Partner, Foot Anstey.
As it stands, the UK Government is offering grants to encourage homeowners to install heat pumps. This sum has already been increased to up to £7,500 – and with plans to almost double the available budget to £295m for the 2025/26 financial year, there are clear and positive steps in the right direction.
However, whilst a helpful contribution, the current cost of installing the system can often exceed the amount of the available subsidy, so it is understandable why the take-up might not be as strong as the Government would like; particularly given the current economic pressures that many homeowners are facing.
Changes are on the horizon, however. The introduction of the Future Homes Standard in 2025 will set new minimal standards for new homes to be highly energy efficient and capable of operating with low-carbon heating systems. As part of these regulations, installation of amenities such as gas boilers will be banned in new build properties from this year. The pending regulations have seen some developers try to get ahead of the curve and begin transitions to energy-efficient alternatives way ahead of the new standards coming into effect. However, there remains uncertainty as to the plans for phasing out gas boilers on existing properties, which is where the bulk of the UK’s housing stock currently is.
The evolving regulatory landscape has also seen significant new changes to permitted development rights for heat pumps announced, which will again take effect early this year, and will make it more attractive to install a heat pump. These rights will simplify processes for home improvements – such as the installation of larger heat pumps, without the need to apply for planning permission. This change aims to streamline installations and reduce administrative burdens for homeowners. Similarly, the requirement that heat pumps be installed at least one metre from a property’s boundary will be removed, which is expected to make it easier for households to install heat pumps, particularly in densely populated areas. This change will facilitate the wider implementation of heat pumps.
Further, the removal of the requirement for ‘detached’ houses to obtain planning permission for more than one heat pump unit to be installed is also positive, although there are many properties in the UK which are not detached and therefore won’t benefit from this relaxation.
In addition to this, the Clean Heat Market Mechanism (CHMM) will also commence on 1 April 2025. This requires boiler manufactures to ensure that 6% of their sales are heat pumps for the 2025-26 period, with penalties for non-compliance. Understandably, this policy has received robust backlash from boiler manufacturers and installers, and time will tell whether it has the desired effect.
Looking ahead, there are certainly mixed feelings. Although the strategy for new homes is much clearer and more achievable than the strategy for existing housing stock, the high costs of installing a heat pump remain likely to dissuade people from prioritising to do so, which may result in Government targets being missed. If installations in the UK slow as they are in the rest of Europe the UK Government will have some tough choices to make – perhaps by offering further incentives such as more attractive grants or by legislating further, but any action the Government chooses to take must be balanced against the tough economic climate that many people are living in.
Likewise, whether the UK can build momentum in relation to the uptake of low-carbon heating solutions will be driven by Government intervention, which is going to make or break whether the planned targets are achieved. If the UK can demonstrate that the package of planning reforms, financial support and other measures that are being implemented as part of a broader strategy to promote low-carbon heating solutions is having the effect of accelerating the uptake of heat pumps, then it could strongly influence global net-zero strategies.
It wouldn’t be surprising to see the Government publish a clear date for the phase out of gas boilers far enough in the future to encourage homeowners to make the switch at an appropriate time. However, even doing this could be problematic for certain vulnerable people and so consideration must be given to whether any exemptions might be needed or enhanced subsidy schemes made available.
