Latest news with #heatpumps
Telegraph
2 days ago
- Business
- Telegraph
Miliband plots 15% net zero tax on gas bills
Ed Miliband is considering plans to overhaul green levies, which experts have warned would push up the average gas bill by £120 a year. The Energy Secretary is looking at removing the taxes that are applied to electricity as part of his plans to encourage more people to buy heat pumps. But he has admitted Rachel Reeves, the Chancellor, would not cover the £4.8 billion-a-year cost, meaning the charges would likely have to be shifted on to gas bills. Ministers and Ofgem, the industry regulator, have spoken positively about the plans, which experts calculate would add 15 per cent to the cost of gas. Mr Miliband's department insisted that no final decision had been taken and dismissed the projections of how much bills would rise as 'speculation'. Under the proposals, subsidies for pensioners and households on benefits would be increased to cushion them from the impact of higher bills. Officials are likely to argue that the average household, which uses a mix of gas and electricity, would face no increase in overall bills as a result. That is because the levies would simply be shifted from their electric bill to their gas bill, with the cost balancing itself out overall. Homes with heat pumps would benefit most, saving £420 a year, but families who are heavily reliant on gas boilers and cookers could end up worse off. The plans emerged in a report drawn up by the Commons net zero committee, which is chaired by Bill Esterson, a Labour MP and former shadow minister. Backbenchers asked Mr Miliband and Miatta Fahnbulleh, his deputy, about calls from some campaigners to 'rebalance' the cost of gas and electricity. In transcripts released by the committee, the Energy Secretary said that there was a 'principled case' for removing levies from electricity. But he warned that the Treasury was unlikely to agree to picking up the cost of doing so, which has been projected at some £4.8 billion a year. 'There is a world where you transfer all the levies to public expenditure. No doubt all of us in our fantasy world would like that to happen,' he told MPs. 'It is billions of pounds of costs. I do not think it will surprise the Committee if I say that is unlikely to happen in the short term, given the fiscal situation that we face.' 'We need to proceed cautiously' Mr Miliband acknowledged that he was looking at proposals to transfer the levies to gas instead and that doing so would push up bills. He said that officials at his department were 'working through' where the costs would fall and how to mitigate them for the poorest households. 'You have 100 per cent of people, more or less, on electricity, and about 80 per cent of people on gas, so if you are transferring the 100 per cent to the 80 per cent, you then have a potential bills effect,' he said. 'I think the principled case for these levies not falling on electricity is clear. The practical solution to make it happen is more complicated, and in a world where we need to protect fairness. We need to proceed cautiously.' Ms Fahnbulleh, the Minister for Energy Consumers, said that the high price of electricity was pushing up the cost of running heat pumps. 'That is a problem for us because we need the running cost to be as cheap as, if not cheaper than, the cost of a gas boiler,' she told the committee. 'No doubt, when you speak to experts, they will all say that rebalancing needs to happen.' Jonathan Brearley, chief executive of the energy watchdog Ofgem, said there was a 'rationality' for shifting levies away from electricity. He said that it was 'the right thing to do from the perspective of getting to net zero' but that inevitably it would result in 'a lot of people losing out'. The revelations come after the climate change committee, which oversees net zero targets, told Mr Miliband to remove green levies from electricity bills. According to Nesta, a charity which promotes the uptake of heat pumps, the taxes make up 16 per cent of the cost of electricity and 5.5 per cent for gas. That means they add £140 to the typical electricity bill and £50 to the average gas bill. Mike Foster, chief executive of the Energy and Utilities Alliance, said Mr Miliband should be 'cautious' about adopting the proposals. 'We have seen in the debate around the Winter Fuel Allowance that changing household energy bills is politically risky,' he said. 'The political optics of seeing your gas bill increase by 15 per cent, for the 25 million households that use gas, to make using a heat pump that costs £13,000 to fit, £120 a year cheaper to run, may be a bridge too far at this time.' A spokesman for the Department of Energy Security and Net Zero said: 'This is speculation – no decisions have been made. 'We will repair our retail energy market and deliver real change, to ensure people have the best possible support to choose more affordable, smarter, clean energy that is right for them.' 'As long as Britain remains exposed to the roller-coaster of global fossil fuel markets, we will be vulnerable to energy price spikes beyond our control. 'That's why our clean energy mission is the best route to protect consumers and bring down bills for good. We will set out further details in due course.'
Telegraph
2 days ago
- Business
- Telegraph
Miliband's heat-pump plans under threat from Reeves's cuts
Ed Miliband could be forced to reduce funding for his flagship heat-pumps policy under spending cuts planned by Rachel Reeves. The Energy Secretary's department is facing significant cuts to fill an estimated £30 billion black hole in Britain's public finances. The Department for Energy Security and Net Zero (DESNZ) is one of several 'unprotected' departments and may have to find billions of pounds of savings from its policy areas. Officials are reportedly looking for savings among Labour's 'warm homes' policies, which include funding for home insulation. The Telegraph understands another policy within the same net zero portfolio is the flagship heat-pump subsidy, which provides up to £7,500 to homeowners looking to install a ground or air source heat pump. Cutting heat-pump funding would mark the latest blow to Mr Miliband, who has already seen several government net zero initiatives rolled back amid concerns they were acting as a brake on growth. After Donald Trump imposed blanket tariffs of 25 per cent on car imports – since lowered to 10pc – Sir Keir Starmer announced that planned electric vehicle restrictions would not apply to some smaller manufacturers, in a concession to the British luxury automotive industry. The fight for net zero has been a source of contention within Labour in recent months, coming to a head last month when Sir Tony Blair warned Sir Keir that his current green policies were 'doomed to fail'. Mr Miliband hit back at the former prime minister this week, accusing him of having a 'defeatist' attitude towards net zero. The Energy Secretary increased the budget for heat-pump installations after taking office last year by adding £55 million to last year's spending plans left by the previous government and doubling the size of the pot to £295 million for this year. Demand for the grants has grown each year after the Conservatives increased the amount that each homeowner can claim. Despite admitting that heat pumps may never be cheaper than gas boilers, Mr Miliband has supported further expansion of the policy and is pushing for fossil-fuel-powered heating to be stripped from all new-build properties before 2027. Labour's manifesto promised an extra £6.6 billion in net zero investment for private homes, for 'insulation and other improvements such as solar panels, batteries and low carbon heating to cut bills'. However, both the heat-pump scheme and home insulation upgrades could be reduced if Ms Reeves follows through with double-digit cuts to the DESNZ budget in her June 11 spending review. It has also been reported that a planned £8.3 billion cash injection for the state-owned GB Energy company over the course of the parliament could be reduced. Health and defence priorities It is understood that no final decisions have been taken, and that Mr Miliband will be left to decide how to allocate the settlement he receives from the Treasury. The review will set departmental budgets for day-to-day spending for the next three years, and capital investment budgets for the next five years. Downing Street has been clear that it will prioritise the budgets of the NHS and the Ministry of Defence, which is set to receive an uplift to at least 2.7 per cent of GDP by the end of the parliament. But Ms Reeves is facing a crisis in the public finances, with the Treasury falling about £30 billion short of the money required to run the Government at current levels, according to the National Institute of Economic and Social Research. Speaking on a podcast released on Friday, Mr Miliband attacked Sir Tony for adopting a 'defeatist' attitude on tackling climate change. In a significant intervention last month, the former prime minister said that net zero was 'doomed to fail' and that it was wrong that people were 'being asked to make financial sacrifices and changes in lifestyle when they know that their impact on global emissions is minimal'. The comments prompted fury inside Downing Street and Sir Tony later appeared to back down, saying Sir Keir Starmer's net zero approach was 'the right one'. Mr Miliband told The Rest is Politics podcast: 'The report itself, he wrote a foreword to the report, is perfectly unobjectionable... but what is disappointing about Tony's foreword, and I have huge respect for Tony, is I think it is incredibly defeatist, which is not what Tony is. It is really defeatist.' Separately on Friday, the head of the Government's official environmental advisory body said he was 'concerned' over the budget for nature restoration ahead of the spending review. Tony Juniper, chairman of Natural England, said the 'very tight' spending settlement expected in light of current economic stresses will pose 'big challenges' for those working to reverse the country's decline in nature. He said: 'I am concerned about the budget side in particular because the job that we need to do is very significant. 'We will work within the envelope that we have, recognising the country does face very serious economic stresses at the moment,' he said. 'But it does concern me naturally in terms of the scale of the task ahead and what we need to do.'
The Guardian
3 days ago
- Business
- The Guardian
The heat pump guide … everything you need to know
Record numbers of heat pumps were installed in the UK in 2024, according to the Heat Pump Association. At just under 100,000, the figure is well below the government's ambitious aim of 600,000 a year by 2028 but is at least edging in the right direction. Even so, it's clear that many more people will need to make the switch from gas boilers to the more carbon-friendly heat pumps if the UK is to meet its net zero goals. The heating and cooling of homes and commercial buildings accounts for 26% of global energy-related emissions, according to the International Energy Agency. In the UK, the National Audit Office reported last year that heating 28m homes created 18% of all UK greenhouse gas emissions in 2021. So it's probably time for many more of us to understand the steps we can take to lower the carbon footprint of our homes. Heat pumps take heat from outside, make it warmer, and transfer it into a building to provide heating and hot water. Depending on the type, pumps can extract heat from the air, ground or water. They can also work in reverse, absorbing heat from a building to cool it down. It may seem counterintuitive, but at the heart of a heat pump is a refrigerant that flows constantly through the system. The process starts with the refrigerant in liquid form absorbing heat from outside. As its temperature rises, the refrigerant turns into a gas (it's like water evaporating at 100C – but with a refrigerant it happens at far lower temperatures, even subzero). The gas flows to a compressor where its temperature is increased because, put simply, the compression means the molecules have less space so they collide more, releasing heat. It's this higher level of heat that is transferred from the refrigerant gas to a building's heating system – warming water for radiators and the hot water tank. Having given up its heat, the gas is decompressed, and turns back to liquid, allowing the cycle to begin over again. Crucially, this also works efficiently in harsh Nordic climates like Sweden, where heat pump manufacturer NIBE is based and the systems are commonplace. Here are the three main types of heat pump on offer: Air source heat pumpThis is the most common form of domestic heat pump in the UK and, as the name suggests, it uses outdoor air to start the 'refrigeration cycle'. The external workings are contained in a box about the size of two wheelie bins, while inside the property a hot water cylinder is needed. Ground source heat pumpThis is the subterranean version, which makes use of underground heat. Pipes are laid under, say, a lawn or in boreholes and a liquid (mainly a mixture of water and antifreeze) is circulated through them to absorb the heat. The heat is transferred into the building where the heat pump raises the temperature for heating and hot water. Ground source heat pumps are more efficient than air-source pumps but can cost more to install. Exhaust air heat pumpThe third type is the exhaust air heat pump, a ventilation system which is growing in popularity, especially with people living in flats, as they don't require an outdoor unit or ground work, just a simple vent in the wall. Here, the heat pump uses waste heat that it draws in from inside the house, extracting the energy to heat radiators or underfloor heating, as well as a hot-water cylinder. The cold, stale air is then exhausted out of the building through the vent, so the system provides heating, hot water and ventilation, and improves air quality by preventing the build-up of condensation. How long do they last?With regular servicing and maintenance, heat pumps will last, on average, for 15 to 20 years. The switch to heat pumps is mainly focused around decarbonisation, the climate crisis and the drive to net zero. But it could also significantly help reduce air pollution. A study published by the University of York found that gas boilers were responsible for 72% of the nitrogen oxides in central London between 2021 and 2023. Rather than running on fossil fuels such as gas, heat pumps use electricity, which, while currently more expensive than gas, can use more sustainable sources – particularly as more wind and solar farms are being built. Heat pumps also use energy more efficiently than gas and oil boilers, and can be up to six times more energy efficient, in the case of the latest NIBE ground source heat pump. To truly enjoy the benefits of a heat pump, it's essential that you get the right one for your home and that it's properly installed by experts. The website, for example, has a step-by-step guide to heat pump installation, setting out all the considerations. Pretty high on the list will be cost – and it's worth knowing that depending where in the UK you live there are grants available, including £7,500 towards an air and ground source heat pump in England and Wales through the boiler upgrade scheme. In Scotland, the government is offering a home energy grant of up to £7,500, plus an additional £7,500 available as an optional interest-free loan. Another benefit is that no VAT is charged on heat pumps in the UK. You'll need your property to be well insulated and, as heat pumps typically operate at lower temperatures than gas boilers, you might need to increase the size of your radiators so they emit sufficient heat. All houses will need a heat loss survey and inspection of their systems before the heat pump is installed. Michael Dungworth, head of technical at NIBE, says: 'The first thing to consider when planning an installation is finding an MCS-certified installer, who can decide on the best solution that would be right for your property.' The company has been making renewable energy solutions since 1952, and has been at the forefront of heat pump technology, producing ever more efficient units, and innovations such as the exhaust air heat pump, most recently with cooling capabilities. 'At NIBE, our products build on decades of research and development,' says Rick Clarke, product manager at NIBE. 'Our units are highly efficient with low running costs, so they contribute towards a sustainable environment.' NIBE has also recently been awarded Quiet Mark certification for its core product range. 'This highlights our commitment to delivering exceptional indoor climate systems, with minimal disruption to home life,' he says. So whether you want to do your bit for the environment by reducing your carbon footprint, or potentially lower your energy bills, a heat pump could be the solution for you. NIBE combines smart technology with renewable energy to produce energy-efficient solutions for heating your home. Take a look at its full range of heat pumps
Daily Mail
3 days ago
- Business
- Daily Mail
Will we see 'noisy heat pump' rows as Ed Miliband lets homeowners put them right next to neighbours?
Homeowners no longer need to get planning permission to install a heat pump less than one metre away from a neighbour's property, the government has said. As Labour battles to boost the number of heat pumps installed across Britain amid its net-zero drive, it eased the planning restriction. Before the announced change, homeowners needed planning permission if they wanted to install a heat pump within one metre of their neighbour's property amid concerns over noise. In locations where homes are close together or terraced, the former rule would often delay heat pump installations. The change relates to the installation of air source heat pumps. Most ground source heat pump installations already fall under permitted development rules and do not require additional planning consent. Air source heat pumps sit on the outside wall of a home and look similar to the air conditioning units seen outside many industrial buildings. The planning changes also included a relaxation of the rules for the size and number of heat pumps households can install. According to the Department for Energy Security and Net Zero, led by Ed Miliband, heat pumps typically have sound levels 'similar to a fridge'. However, some people have previously complained about heat pump noise, saying they can sound similar to industrial fan units found by restaurant kitchens. The government department said it commissioned independent research last year which concluded that noise complaints from air source heat pumps were rare and that heat pumps were generally perceived as being very quiet. For many homeowners concerns remain about the high cost of heat pumps, despite grants being available. Homeowners who want to make the leap from gas boiler to heat pump already have access to grants worth up to £7,500. Even with the grants, critics claim heat pumps remain an option that only a minority of households can afford. Thomas Clarke, who runs Asset Plumbing & Heating in London, told This is Money the planning rule easing will help his customers and business. He said: 'Previously, there would often be long delays and many customers had to pay extra for an architect in order to get a heat pump fitted. The easing of the planning rule is helping to streamline the process.' Clarke told This is Money that the government should provide more help to small and medium sized businesses to ensure they can afford to train up apprentices. He said a shortage in the number of people trained to install heat pumps was driving up the cost of installations for households. David Broom, new build partnerships director at Kensa, told This is Money: 'The changes will make it easier for households to install air source heat pumps without needing planning permission. 'Any move that removes barriers and helps more people switch to efficient, low-carbon heating should be welcomed.' He added: 'For ground source heat pumps, the good news is most installations already fall under permitted development, meaning they won't require planning consent. 'While these updates are a step in the right direction and should help boost uptake, more still needs to be done to make heat pumps accessible to every household. 'The most effective next move would be for the government to implement the long-awaited Future Homes Standard. This would end gas boiler installations in new developments, unlocking a market for around 200,000 heat pump installations each year.' A Department for Energy Security and Net Zero spokesperson told This is Money: 'The energy shocks of recent years have shown the urgent need to upgrade British homes and our Warm Homes Plan will make them cheaper and cleaner to run, rolling out upgrades from new insulation to solar and heat pumps. 'We are helping more people get a heat pump, providing £7,500 towards the cost, and they are three times more efficient than gas boilers, enabling families to save around £100 a year by using a smart tariff. 'All heat pumps installed have to comply with strict sound emission limits.' How to find a new mortgage Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible. Buy-to-let landlords should also act as soon as they can. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you What if I need to remortgage? Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it. Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees. Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power. What about buy-to-let landlords Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. How to compare mortgage costs The best way to compare mortgage costs and find the right deal for you is to speak to a broker. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice. Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs. If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you. > Find your best mortgage deal with This is Money and L&C Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
Telegraph
4 days ago
- Business
- Telegraph
Miliband accused of pitting ‘neighbours against neighbours' after scrapping heat pump rule
Ed Miliband has been accused of pitting 'neighbours against neighbours' after scrapping a heat pump planning rule to boost demand. Homeowners switching to a heat pump will no longer have to acquire planning permission to install the technology at least one metre away from a neighbouring property, under relaxed measures announced on Thursday. Critics said the decision to scrap the requirement, originally introduced to mitigate noise pollution, was simply 'another quick fix' to inflate heat pump uptake figures amid weak demand for the green technology. Andrew Montford, of Net Zero Watch, said: 'Heat pumps are clearly a mistake. They are expensive to install and expensive to run, and now it seems they are going to set neighbour against neighbour too. It's hard to identify any redeeming features at all.' In 2023, the previous government announced that the 'arbitrary' one-metre rule would be scrapped after developers complained it was too challenging to implement. Mr Miliband, the Energy Secretary, is spearheading the mass adoption of heat pumps and has a target of fitting 600,000 a year in Britain by 2028. In the past 12 months, only 65,600 have been installed, according to MCS, the certification body. In contrast, about 1.5 million new gas-fired boilers were fitted in the same period, mostly to replace worn-out models. Local authorities are said to be bracing for a rise in noise complaints as Labour pushes ahead with the heat pump rollout. To encourage demand, ministers are doubling next year's funding for a heat pump subsidies scheme that allows families to claim up to £7,500 towards the cost of a new unit. A report last year from the Department for Energy Security and Net Zero said that local planning authorities 'would not have the capacity to cope with the increase in planning applications and noise complaints' as the heat pump rollout expands to built-up areas. It found that one in four people living near a heat pump found the noise to be intrusive, with complaints 'usually centred around disturbed sleep'. Mike Foster, of the Energy Utilities Alliance trade body, said relaxing the rules around planning permission was 'another quick fix in the rush to drive up the numbers fitted'. He added: 'The answer to the problem is to make the appliance quieter, not get rid of a protection against noise. 'Driving up standards is always a better way of approaching such challenges rather than pretending a problem doesn't exist. 'Obviously those companies installing heat pumps, with the generous taxpayer subsidy, want the process to be quick, but they don't have to live next door to what might be a noisy appliance.' Last week, it emerged that the Energy Secretary's neighbours are protesting the development of a five-storey block of flats over noise pollution concerns related to the heat pumps included in the designs. Residents of Dartmouth Park, a wealthy suburb in the Prime Minister's constituency, claimed the development 'poses a risk of ongoing noise pollution, further impacting residents' quality of life.' Among those who have objected to Camden council is Mr Miliband's wife, Justine Thornton, who called the design 'too tall, too bulky and too dense', although she has not commented specifically on the inclusion of heat pumps. A government spokesman said: 'The energy shocks of recent years have shown the urgent need to upgrade British homes and our Warm Homes Plan will make them cheaper and cleaner to run, rolling out upgrades from new insulation to solar and heat pumps. 'We have seen incredible innovation in heat pump design over the past decade, with technological advances meaning they have become quieter over time and noise complaints are rare. All heat pumps installed have to comply with strict sound emission limits.'
