EUA report tracks cost of green energy switch

A new report published today by the Energy and Utilities Alliance (EUA) has found customers are typically facing a five-fold cost increase to install a heat pump compared to a hydrogen-ready boiler.

The report found households can currently expect to pay up to £15,000 for transition to a heat pump depending on the property type, compared to less than £3,000 for a hydrogen-ready boiler.

In addition to the higher cost of the heat pump itself, the disparity was largely due to the additional energy efficiency measures needed to enable a heat pump to operate efficiently, plus the need to fit a hot water cylinder and new radiators, it said, while some homes also require new internal pipework.

In its recent Heat and Buildings Strategy, the government set an ambitious cost reduction target for heat pumps to reach cost parity with gas boilers by the end of the decade, with 25-50% of the reduction achieved by 2025.

Mike Foster, CEO of Energy and Utilities Alliance, said: “We need to decarbonise homes if we are to meet our Net Zero ambitions but consumers simply do not have the cash to pay for the high upfront costs of many low carbon heating options. The recent Heat and Building Strategy is right to demand massive reductions in the cost of heat pumps, which according to this report can cost consumers up to seven times that of a simple boiler switch.

“Many heating industry experts are sceptical that the scale of the cost reduction can be achieved, with the claim that heat pump costs will be at parity with gas boilers by April next year, as simply implausible.

“Regardless of what happens in the heat pump market, it is increasingly clear that they are not a like-for-like replacement of a gas boiler. Consumers will face considerable disruption, cost and the need for behavioural change to retrofit their homes with a heat pump.

“It is recognised that the majority of UK homes are simply not suitable for heat pumps. When an existing boiler needs replacing, installing a hydrogen-ready version, at no extra cost, means that a householder can switch over to clean burning hydrogen when it’s available in the network.”

The EUA is urging government to opt for mandated hydrogen ready boilers when a boiler reaches the end of its natural life.

Mike added: “The UK’s leading boiler manufacturers have made a promise that the hydrogen-ready boilers can be produced at the equivalent cost of today’s natural gas equivalents and with the products already developed they are ready to start manufacturing.”

To read the report, visit https://eua.org.uk/resources/residential-heat-the-upfront-cost-of-decarbonising-your-home/