A new report from strategic consultancy Stonehaven warns that the UK’s current approach to heat decarbonisation is unlikely to meet the Climate Change Committee’s (CCC) targets without a radical rethink.
Titled Powering Homes, Powering Growth: A practical path to heat decarbonisation, the paper offers an analysis as to why Government initiatives promoting heat pumps over the past fifteen years have been ineffective, and offers policy solutions to improve uptake.
According to the Climate Change Committee (CCC), demand for heat pumps needs to increase by nearly 50% every year to 2030, reaching around 450,000 installations annually and rising to 1.5 million by 2035. Yet, despite four government-backed initiatives over the past decade and a half, deployment remains far below target.
To solve this issue, the report proposes a fundamental reset of the UK’s heat decarbonisation strategy through the Government’s forthcoming Warm Homes Plan. It calls for a move towards a framework which will encourage competition amongst multiple low-carbon heating solutions – including hybrid systems, bivalent setups and emerging technologies like heat batteries.
This proposal seeks to balance delivery against pragmatism, shifting the central problem for Government from “How do we get heat pumps into households?” to “How do we enable consumers to judge what heat decarbonisation system would work for their house?”
The report also recommends reforming the Clean Heat Market Mechanism (CHMM) and phasing out the Boiler Upgrade Scheme, replacing it with a new “boiler tax” linked to the carbon cost of gas heating. This would create a technology-neutral incentive for low-carbon solutions, rewarding actual emissions reductions rather than prescribing specific technologies.
Another key recommendation is the need to accelerate innovation and new market offers, including support for meter-splitting to allow more sophisticated tariffs and new consumer products that make low-carbon heating more affordable and attractive.
Adam Bell, Director of Policy at Stonehaven, emphasised the benefits of reducing industrial energy costs, “After 15 years of limited progress, it is time for a pragmatic reset. Rather than focusing on replacing gas boilers with a single alternative, the UK should encourage a diverse mix of household-level decarbonisation solutions, enabling businesses and consumers to drive change together.
“Decarbonising heat will not be achieved through central planning from Whitehall. It will be achieved when households are empowered to make the right choices for their homes. By widening the path to decarbonisation, we can reach our climate targets at a pace that once seemed impossible.”
