News

UK cuts heat pump costs by 50% to 70%

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  • Date:2022/04/25

The UK announced its "Net Zero Strategy" on its official website, which aims to significantly reduce greenhouse gas emissions and achieve net zero emissions by 2050. The UK's official plan, in terms of building emissions reduction, in order to reduce the carbon emissions of 30 million buildings, each homeowner can apply for a grant of up to 5,000 pounds for the installation of low-carbon heat pumps

Heat pumps are a mature technology that can be deployed on a large scale with the right market and regulatory conditions. Therefore, the UK government plans to support the promotion of heat pumps in a number of different ways:

The UK plans to phase out the installation of new gas boilers:

  1. Currently, around 85% of UK households are heated with gas boilers, which are highly polluting and are a major source of high emissions from the construction industry. Given that gas boilers have a lifespan of around 15 years, the UK plans to phase out the installation of new gas boilers after 2035 in order to achieve net zero emissions in a cost-effective, consumer-friendly way
  2. UK aims to incentivise early adopters of heat pumps to grow their market through Boiler Upgrade Scheme grants and to adopt successful experience in the development of the electric vehicle market, recommends market-based regulation for manufacturers
  3. At the same time, the UK will set a clear target for the industry to reduce the cost of installing heat pumps by at least 25-50% by 2025 and ensure that by 2030 heat pumps will not cost more to buy and run than gas boilers

UK will continue to invest in R&D and innovation in heat pumps and related technologies

  1. In the UK's recent energy security strategy, the government announced a roadmap to make the UK energy self-reliant. Heat pumps have played a major role in the scheme, with Prime Minister Boris Johnson introducing a major subsidy scheme to cut the cost of new heat pumps for households in half. The average cost of an energy efficient heat pump is close to £10,000 at market prices
  2. However, this Boiler Upgrade Scheme (BUS) will provide up to £5,000 to a small number of homeowners in England and Wales to help replace old gas boilers
  3. This has led to the government's net zero commitment to ban the sale of new gas boilers from 2036

The government's current target is to install 600,000 heat pumps a year by 2028

  1. To speed up the process and reduce the cost of heat pumps, Prime Minister Rishi Sunak recently announced that the government will remove the 5% VAT on energy efficiency technologies in homes, including heat pumps, over the next five years
  2. In light of this, UK-based energy company Octopus Energy has struck a major deal that it says will make heat pumps significantly cheaper
  3. Octopus has made a controlled investment in heat pump manufacturer Renewable Energy Devices (RED) in a multi-million pound deal and wants to make 'quiet, efficient' heat pumps in a variety of sizes to fit different UK homes

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