A timely incentive or insufficient? Brands react to Heat and Buildings Strategy

This week the government released the long-awaited details of its Heat and Buildings Strategy – sparking reaction from industry brands.

Funding included a commitment of £5,000 towards heat pump installations through a £450m Boiler Upgrade Scheme replacing the domestic RHI from April of next year.

The heat pump funding is part of a £3.9 billion commitment to greener buildings, although a decision on introducing hydrogen gas for heating has been delayed until 2026.

There has been a rally of responses from across heating brands since the strategy publication on Monday (October 18).

STILL A COSTLY INVESTMENT

Carl Arntzen, CEO of Worcester Bosch, said the full adaptations for a heat pump installation had wider implications that must be accounted for.

He said: “Although the government’s Heat and Buildings Strategy does look like a clear indication of ongoing investment, it doesn’t go far enough.

“When considering a heat pump there are many factors to assess which are not considered here, such as the property’s suitability. A home may need to be adapted to accommodate a heat pump, such as resizing radiators and making space for hot water cylinders, which carry cost implications. Therefore, the proposed grants may help with the cost to purchase a heat pump, but there will still be costly investment required from homeowners in existing properties.

“As for boilers, the strategy does not refer to any legislation behind a boiler ban, so it’s not surprising that there is confusion among installers and homeowners.

“Whilst it is encouraging to see that hydrogen is still on the agenda and is referred to within the strategy, it is a shame to see that a decision around hydrogen won’t be made until five years from now. With hydrogen-ready boilers already successfully trialled, they could be a strong alternative to fossil fuel boilers on the market today – yet this strategy seems to omit them.”

TIMELY PUBLICATION

Graham Russell, managing director of heating and cooling systems manufacturer, Viessmann, noted the timeliness of the government release.

He said: “The new strategy sets out a plan to achieve substantial carbon reductions from heat in buildings during this decade, towards meeting the net zero target in 2050. It’s publication, just a few days before COP26, is timely.

“With over 20% of the UK’s total greenhouse gas emissions attributed to buildings, the country is boldly taking the opportunity to showcase leadership in heat decarbonisation after little progress over the last decade.

“After over 30 years of presence in the UK market, Viessmann is vested in the success of its low carbon transition. We see the publication of the strategy as an important milestone to unleash the innovation and investment in skills necessary to drive the uptake of new technology.

“The future of heat is about a mix of technologies and solutions working in tandem. There is no quick fix or single solution available to decarbonise the UK’s building stock. An array of technologies will have a role to play.

“Given the diversity of the UK building stock and consumer base, we are delighted that the strategy encompasses a mix of policies to promote heat pumps, hydrogen heat, heat networks and energy efficiency as well as new funding giving the industry a framework to push forward with innovative solutions.”

LEVY CONCERNS

Karen Boswell OBE, managing director at Baxi Heating, stressed that net zero required both innovation from the heating industry and a pragmatic policy framework.

She added: “We firmly believe that all viable technologies have a place, including electrification, hydrogen, and deployment of low carbon heat networks. BEIS is wise to leave these options open as it is abundantly clear that no single solution will deliver net-zero.

“One key part of the strategy is the Boiler Upgrade Scheme, designed to encourage the uptake of heat pumps. In our recently published white paper on this subject we highlighted that the £4,000 per installation grant originally consulted upon may not be sufficient to close the affordability gap. Therefore, we are pleased to see a higher grant level of £5,000 grant taken forward in the strategy.

“Last, but by no means least, we must collectively deliver a just energy transition, ensuring no households are left behind. Running cost is a critical consideration and fuel poverty has no place in one of the world’s leading economies.

“As such we have concerns over the proposals to reallocate the levy cost aspect of electricity bills onto gas bills over time. This is a sensitive topic which needs to be carefully considered. In our white paper we proposed an alternative approach which has the desired effect of improving cost-competitiveness of heat pump technology without disadvantage to those less able to pay or unable to join the first wave of switching to low carbon heat.”

TRAINING INCENTIVES NEEDED

Mark Wilkins, technologies and training director at Vaillant, backed the strategy’s immediate focus on heat pumps.

He said: “Time is of the essence when it comes to decarbonisation, and heat pumps are the best way to decarbonise today. Hydrogen will be a low carbon solution but more tests need to be carried out before we can successfully roll out hydrogen for heating. In the future, there will be a mix of both hydrogen-fuelled boilers and heat pumps as there is no silver bullet to lowering carbon emissions of the UK’s diverse housing stock.

“The number of heat pump installers needs to increase substantially in order to support the ambitions laid out in the Heat and Buildings Strategy and the government’s levelling up agenda. Vaillant has the capacity to upskill our excellent base of heating installers with the necessary skills to install heat pumps. This does however come at a cost to installers as they have to lose valuable income when undertaking training courses and we urge the government to take the necessary steps to recognise and incentivise those wishing to embark on the necessary training to become low carbon installers.”

ARMY OF INSTALLERS

Phil Hurley, managing director of NIBE and chair of the HPA, said phased out dates for the installation of fossil fuel heating, increased funding support for households purchasing heat pumps, and the rebalancing of environmental levies on electricity, were all vital to growth in the heat pump market.

He said: “The heat pump industry warmly welcomes these bold steps forward. The industry in the best shape it has ever been, with sales this year already double those seen ever before.

“This announcement is timed perfectly to take advantage of the Heat Pump Association’s recently launched training course, with the industry now ready to retrain the UK’s army of installers with the capacity to train up to 40,000 per year, to ensure consumers can find a suitably trained and skilled heat pump installer when they need one.

“Today’s announcement will give industry and installers a huge confidence boost that now is the time to scale-up and retrain in preparation for the mass roll out of heat pumps, as well as making heat pumps more affordable, so all consumers can soon access and enjoy the benefits of reliable low carbon heating that stands the test of time.”

DON’T FORGET THE RHI

Iain Bevan, commercial manager of heating and renewables at Daikin UK, said he looked forward to finding out more about who will be eligible and which sustainable heating systems are covered.

He said: “We believe that hybrid systems, where a heat pump works alongside a gas boiler, should be included as they are a vital stepping-stone for those who are new to renewable technology, and can still reduce household CO2 emissions by as much as 55% compared to a traditional gas boiler.

“We know that many homeowners will appreciate this up-front funding, but for anyone able to have a heat pump installed before April 2022, we still believe that the Domestic Renewable Heat Incentive is a very good option and will provide a higher level of subsidy over the system’s lifespan.

“Whilst any incentives that remove the financial barriers to heat pump adoption are a positive step, we think the government should be going further to ensure that the technology can be rolled out at the scale that is needed. We urge the government to look again at support for home insulation schemes, and to urgently address the fuel levy that continues to subsidise gas rather than electricity.”

GROWTH IN GREEN JOBS

Russell Deane, head of residential heating and ventilation at Mitsubishi Electric, said installer training was needed to ensure heat pump costs reduce over time.

“Mitsubishi Electric welcomes the government’s drive to reduce the cost of heat pumps, and its recognition of the role that such technologies can play in the decarbonisation of our housing stock. If we are to stand any chance of reaching our net zero goals, the way we heat our buildings must change and heat pumps are a big part of this.

“To ensure the costs continue to drop for the consumer we must now see a concerted effort to train up a nationwide network of installers that can deliver on this new opportunity.

“This can be done by upskilling gas boiler engineers and installers to ensure they are not left behind as the country moves towards a growth in green jobs and heat pumps receive the backing of the big energy network providers.”

FURTHER DETAIL NEEDED

Neil Sawers, Grant UK’s commercial technical manager, said questions remained over the government’s new approach.

Neil added: “Grant UK welcomes this step on the journey to Net Zero for the UK, however there are some barriers to overcome before we can truly begin to roll out some of the government’s proposals.

“Positive steps towards resolving the current skills shortage are being taken with both the CIPHE Low Temperature Heating Course in addition to the Heat Pump Associations (HPA) LCL Heat Pump Training course, both of which will be available from Grant UK towards the end of this year. It is imperative that both the government’s funding initiatives and retraining/up-skilling of the workforce work in parallel.

“We are concerned that as yet there has been no announcement regarding other off gas heating alternatives, such as biofuels (HVO) and hybrid heating which would have a major impact on reducing carbon emissions and are more practical in terms of an immediate roll out.

“Grant will continue to work with industry and government to develop affordable solutions that focus not only on new-build and retrofit homes, but on the harder questions such as off-gas and hard to heat homes.”