A new analysis by Nesta has revealed that the UK needs one in ten households to adopt heat pumps or other low-carbon heating systems during the current Parliament in order to meet its climate targets.
That marks a necessary 12-fold increase in installations compared to the previous five years, and represents over 3 million homes that must transition to these systems to meet the targets, posing a significant upscale in the national drive to electrify home heating.
Nesta’s report, which was released earlier this week, indicates that the UK is currently lagging behind its legally binding carbon budgets, primarily due to inadequate home heating solutions, which contribute 14% to the UK’s total carbon emissions. Notably, home heating emissions remain dangerously close to their levels from the 1990s.
The report underscores the failure of prior administrations to advance essential policies, resulting in a 15% shortfall in emissions reduction from residential settings necessary for future carbon budgets. This gap is attributed to decisions like scrapping higher energy efficiency standards for landlords and postponing the boiler phase-out in off-gas grid homes from 2026 to 2035.
Nesta’s policy blueprint, “Delivering clean heat: a policy plan,” provides a detailed agenda for immediate action by the new Government. The plan proposes:
- Adjusting energy bill structures to make the running costs of heat pumps comparable to gas boilers by revising taxes and levies that currently inflate electricity prices.
- Establishing a national agency to oversee government heat and efficiency schemes and assist local authorities with the transition.
- Confirming the exclusion of hydrogen for domestic heating and setting clear timelines for phasing out new boilers.
- Initiating pilot schemes for neighbourhood-wide transitions to low-carbon heat, which could potentially include shared infrastructure like heat networks, to facilitate mass switching.
Nesta’s analysis projects that the proposed policy adjustments could reduce energy bills for households switching to heat pumps by approximately £400 annually.
Madeleine Gabriel, Director of Sustainable Future at Nesta, emphasised the necessity of reverting to proactive energy policies to align with the UK’s net zero objectives. She stated, “The new UK Government will need to reverse the drift away from energy policies that ensured we would meet the UK’s net zero targets. It has inherited a big problem with home heating and will need to take urgent action.”
Marcus Shepheard, co-author and Policy Manager at Nesta, added, “Delivery has to be the top priority for this Government. We need to rapidly scale up the heat transition to get the UK back on track. If we get this right the prize is huge and transformative. It means energy security for the country as a whole, and better, warmer homes that are cheaper to run for millions of people. The new Government should grasp the opportunity – there is consensus on what needs to be done but there is no time for delay.”
Charles Wood, Deputy Director at Energy UK, also supported the call for a unified approach to decarbonise residential and commercial spaces, commenting, “A coordinated approach under the new Government is essential to accelerate progress towards the goal of decarbonising our homes and businesses. Bold and decisive action is required to give both consumers and industry the confidence to invest. Nesta has rightly highlighted some of the most important elements needed for rapid delivery of low carbon heat in collaboration with the wider sector.”
In line with Nesta’s recommendations, the plan also advocates for an overhaul in consumer incentives and industry collaboration to reduce installation costs and streamline consumer financing options, such as subsidies and zero-interest loans. The report calls for special attention to be given to social housing and low-income households, proposing fully-funded installations to ensure equitable access to low-carbon solutions.