Decarbonising heat in homes – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Business, Energy and Industrial Strategy Committee

Date Published: 3 February 2022

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Summary

The UK was one of the first major global economies to legislate a target to achieve net zero carbon emissions by 2050, but the UK will not hit its net zero target if it does not decarbonise residential heating. The Government is not yet on track to deliver on its own targets and more urgent changes are required. Whilst the volatility of the gas market is exposing families to ever higher heating bills, more needs to be done to explain to the public why, how, and when their heating systems will be required to change and the potential costs and benefits this transition may bring.

Our inquiry has highlighted that decarbonising residential heating is a difficult task due to the scale, complexity, and cost of the challenge. According to the Climate Change Committee (CCC), there are 29 million existing homes that need to be upgraded to low carbon heating systems by 2050. This is complicated by the fact that the UK’s housing stock is one of the oldest and worst insulated in all of Europe, with only 15% of housing being built since 1990. It is expected that heating in homes, in the UK, will be decarbonised by one of three low carbon technologies: (i) heat pumps, (ii) hydrogen and/or (iii) heat networks, alongside the essential work of increasing energy efficiency through insulation upgrades. The suitability of these alternative heating solutions is dependent on factors including regional geography, house type, what heating systems are currently in use, and whether existing homes are connected to the gas grid, as well as other changes needed in the home.

The CCC estimates that an investment of about £250 billion will be needed to fully decarbonise homes by 2050, the equivalent of about £9 billion each year from the late 2020s to 2050. According to the CCC, the total cost of heat decarbonisation in each home will be, on average, under £10,000. This cost reflects a combination of low carbon heating systems and energy efficiency retrofit costs. Asking households to pay upwards of an extra £10,000, as part of the objective of net zero, to replace their existing home heating which is working perfectly adequately is a major challenge. The Heat and Buildings Strategy announced the introduction of the Boiler Upgrade Scheme to help households recuperate the costs associated with installing some low carbon heating technologies, such as air source heat pumps and biomass boilers. However, the scheme is not of the scale that is required to meet the Government’s targets of decarbonising residential heat.

The Government should work with industry, consumers, and affected workers to produce an effective road map detailing how the transition to low carbon heating will take place, and to include what this will mean for different households in different parts of the country and for workers whose jobs might be affected in existing carbon intensive parts of the heating sector. We recommend this is done at local level in partnership with local government. The long overdue Heat and Buildings Strategy published in October 2021 failed to provide sufficient policy detail or clarity on delivery.

Our inquiry has also brought to our attention the gaps in regulation and existing policy that obfuscate the delivery of low carbon heating systems. For example, how implementing the Future Homes Standard in 2025 will require homes built between now and 2025 to be upgraded to low carbon heating systems with additional and unnecessary associated costs.

Throughout our inquiry, we have established how heat pump markets and supply chains can be scaled up to meet Government targets, particularly the target to deliver 600,000 heat pumps a year by 2028. It is vital that the Government meets its target or there will be a great risk that the UK will fall off course in delivering net zero by 2050. We have recommended that the Government introduce a heat decarbonisation sector deal to sufficiently scale up the heat pump market to meet the Government’s heat pump target, as well as develop and innovate other low carbon heating technologies to deliver the transition to decarbonised home heating.

A crucial aspect of scaling up, relevant for all low carbon heating technologies, is the upskilling of the heating workforce. As the demand for low carbon heating technologies increases, new heating systems will need to be installed and serviced in homes. The current carbon intensive heating sector workforce should be given the opportunity of accessing the training and education required to transition to the low carbon heating sector. We have also recommended that the Government create a low carbon heating apprenticeship programme to get young people low carbon competent and ready for this important and growing sector.

Transitioning to low carbon heating affects households as the task is predicated on their willingness to allow changes to be made in their homes. Our inquiry found that consumer awareness was extremely limited. Consumers must be made aware of the required transition to low carbon heating, what needs to be done and how this will affect them. The Heat and Buildings Strategy did not outline how consumer awareness and engagement will be increased, but this work is essential. We recommend that the Government creates a public awareness campaign, in partnership with energy companies, so that consumers become more aware of the changes needed.

Parliament has declared a climate emergency and we need to deliver net zero emissions by 2050. Our inquiry into the decarbonisation of residential heat has highlighted that there is still much that needs to be done if we are to deliver the decarbonisation of heat, and how essential this is if the UK is to hit its net zero target. Contrary to the Government’s approach to the publication of the Heat and Buildings Strategy and heat policy as a whole, now is not the time to delay.