As the UK energy system moves towards net zero compliance, heat pumps will likely play a key role in this transition. In fact, the government is currently proposing a target of 600,000 heat pumps to be installed annually by 2028. This is an ambitious goal, but it will fall far short of deployment levels needed to meet a net zero target.
Today’s Renewable Heat Incentive is set to deploy less than one-sixth of the domestic heat pumps it intended by its original end date of April 2021. And other current and planned programmes will not significantly increase the amount of heat pumps deployed. This paper examines how to close this policy gap and meet the bold targets.
The scale of change required is a challenging one and will require a longer-term and more coordinated set of policy interventions than the limited measures presently planned by the government. Policymakers must look at regulation, restructuring of taxes, financial support, area-based planning and citizen engagement, among other ideas.
This paper considers previous deployment of low-carbon heating policies as evidence of an optimal approach and proposes a heat pump policy package on a clear timeline. Key elements of our proposed package to 2030 include:
- Raising the ambition for heat pump deployment
- Establishing a heat pump council this year
- Scaling up financial support using capital grants starting in 2021
- Permanently restructuring fiscal and pricing signals by the end of this parliament
- Signalling the intention to regulate for all segments of the home heating market this year