Heat pump installations 90pc below Miliband's target

Telegraph

6 days ago

Heat pump installations are falling short of Ed Miliband's targets, with just 30,000 fitted to British homes in the past six months – far below an annual goal of 600,000.
On Wednesday, new data from the UK's main renewables trade body found that households increased the number of heat pumps installed over the past year – but it still remains 90pc below the Government's target on an annual basis.
More than 172,000 small-scale renewables – which includes batteries, solar panels as well as heat pumps – were installed between January and June this year, mostly in homes, according to the Microgeneration Certification Scheme (MCS) data. It represents a 37pc increase.
Of this, the most popular renewable technology is solar panels, with 123,000 installations in the first six months of this year.
Ian Rippin, the chief executive of MCS, said: 'Across all renewable technologies, we are seeing a dramatic rise in the number of installations being delivered into homes, helping to reduce energy bills for consumers and drive down emissions.
However, the figures illustrates the yawning gulf between the Government's ambitions for renewables and the still-glacial pace at which they are being installed.
The UK has 25 million homes heated by gas boilers, and another two million that rely on oil. At the current installation rate it would take 150 years to equip them all with renewable heating technologies.
Mike Foster, the chief executive of the Energy and Utilities Alliance, a trade body for heating installers, said the main factor supporting heat pump installations was the Boiler Upgrade Scheme subsidy – worth up to £7,500 per home and paid for by taxpayers and energy bill levies.
'It means that we have a Labour Government which should be progressive, taking money from the poor and giving it to the well-off, so they can boast about their green credentials. I don't believe people voted Labour for this to happen,' he said.
Ofgem data show that the Government has paid out £328m in subsidies to home owners installing 49,136 low carbon heating products. Heat pumps are, however, highly efficient, delivering up to four units of heat for each unit of electricity needed to run them.
Grants for their installation stem from Ofgem's boiler upgrade scheme, which was introduced in May 2022 as a way of reducing the 68 million tonnes of CO2 emitted annually from home heating – about 18pc of UK emissions.
The aim is to eventually replace all boilers with such low-carbon heating systems, which extract heat from the environment and then use electricity to transfer the heat into people's homes via radiators, underfloor heating or as hot water.
But there is a huge financial barrier to achieving that aim, as heat pump installations typically cost £14,000.
That means that, even with grants up to £7,500, installing new heat pumps remains more expensive than replacing gas boilers, which usually costs between £2,000 and £4,000.
The MCS said that, with the Future Homes standard set to mandate solar panels and low carbon heating in new-build homes from 2027, there was massive potential for growth in the low carbon tech industry – as the Government attempts to boost house building.
Its figures also show that there were almost 50,000 renewable installations on newly built properties, accounting for 28pc of the total for the year so far.This was significantly up on the first half of 2024, when they made up 21pc of the 125,000 installations overall.
Miatta Fahnbulleh, the energy minister, has claimed that people can save 'hundreds of pounds off their energy bills' with solar panels, heat pumps and batteries.
Mr Foster disagreed. 'We have the bizarre situation of giving subsidies to well-off households to buy heat pumps, the vast majority of which are imported, replacing boilers which are mostly made in the UK.
'And if the British boiler manufacturer doesn't install the government quota of heat pumps, they get fined. The industry reckons this year alone fines will be close to £30m.
'The British public is ultimately having to pay those fines through higher prices on the boilers they buy, which is of course the intention. Ministers can't make heat pumps cheaper, so they are making boilers more expensive instead.'
Meanwhile, the Advertising Standards Authority (ASA) has banned two more ads for misleading consumers about the costs of installing heat pumps. It found that ads for home heating supplier Aira and EDF Energy both omitted information about the eligibility criteria for Government funding.
It comes a week after the ASA banned an ad for Octopus Energy for misleading consumers with claims that they could have a heat pump installed for as little as £500.