Government turning up the heat on gas boilers

Government turning up the heat on gas boilers

It’s the COP26 climate summit in Glasgow right now. Therefore, the government has finally published its heat and buildings strategy. What did it reveal? Well, let’s just say that inefficient gas-guzzling boiler owners will be feeling a tad nervous. Boris’s bunch have got fossil-fuelled homes firmly in their sights.

With roughly 14% of the UK’s carbon emissions caused by heating our homes, and energy prices rising faster than one of Elon Musk’s rockets, the government has decided that now’s the time to reduce our reliance on gas. This is a key part of their plan to reach net-zero emissions by 2050. 

So what’s happening?

The big news is that the government has replaced its Clean Heat Grant with a new Boiler Upgrade Scheme. It has also pledged £3.9 million of funding to help decarbonise our homes. This money will be used to help homeowners boot out their old boilers and replace them with low-carbon heating systems.

The government has also set some deadlines: builders will be banned from fitting conventional gas boilers in new-build homes by 2025. What’s more, the sale of gas boilers will be banned altogether by 2035. The Boris batch want us to transition to heat pumps or even hydrogen boilers instead. 

The plan of action doesn’t stop there though. Controversially, the government also wants to incentivise mortgage lending on energy-efficient properties. Those buying eco-friendly homes would receive favourable terms whilst those buying older properties will need to make improvements as a condition of their mortgage. Now that’s put the feline squarely amongst the flock. 

All hands to the pumps

So is there merit in the government’s proposals? It depends what you make of heat pumps. There are currently two types available: air source heat pumps and ground source heat pumps. Both draw ambient heat from the environment and then increase its temperature using a compressor. This then heats a home’s water tank, radiators and/or under-floor heating.

Heat pumps are very environmentally friendly. They could help you save money, too: about £400 per year (for an average four-bedroom house) compared with an old G-rated gas boiler. The government is therefore offering upfront payments of £5,000 to people who install air source pumps and £6,000 for ground source pumps. 

Sadly, however, the plan has some drawbacks. Installing heat pumps costs a heck of a lot more than a few thousand squids. In fact, an air source pump can set you back up to £14,000. Consequently, the government’s aim to make the cost of installing a heat pump the same as replacing your gas boiler is slightly unrealistic. Gas boilers currently cost £1,000 to £2,000 to upgrade. 

Whilst the planet is crying out for heat pumps, the public is therefore slightly lukewarm. A report by the Energy and Utilities Alliance, for example, claims that 80% of people believe heat pumps are too expensive, and only 26% would consider installing one even with financial support. Hmmm.

Fortunately, the government is looking at alternatives, too. Indeed, they’re currently exploring whether new gas boilers could be converted to use hydrogen by 2026. There’s just one problem: there are currently no hydrogen-ready boilers on the market. Centrica thinks it could be a decade before they’re available for domestic use. 

Putting your mortgage on it

Now let’s return to that controversial mortgage proposal. Some providers, such as NatWest, already offer discounted rates on the most eco-friendly homes. What Boris’s brain trust is suggesting this time, however, goes a lot further.

Effectively, the government’s plan will penalise homes with poor ECPs. Mortgage companies will be expected to link home financing to energy performance, and lending on energy inefficient properties could even be banned if insufficient progress is made. The government wants the average EPC to be band C by 2030.

This plan is so contentious because only 40% of the nation’s homes are currently rated band C or over. What’s more, it can be extremely expensive to boost a home’s energy performance. For example, Nationwide have calculated that it can cost almost £26,000 to reach the necessary standard if your home is currently rated F or G. This is big money. 

The government’s policy, therefore, would force people to spend thousands on home improvements or trap them in energy inefficient homes. This discriminates against poorer customers and could leave thousands unable to sell up if they needed to. We also wonder how it would work with Listed buildings? Overall, this looks like a well-intentioned policy that might backfire politically. 

Plugging the leaks

Finally, there’s one big factor that makes it uniquely difficult for the UK to meet it’s home emissions aspirations: our housing stock is old and, not to put too fine a point on it, rather leaky. A large proportion of our homes simply aren’t suitable for heat pumps because they lose more heat than a heat pump can pump. 

It’s no surprise, therefore, that the Federation of Master Builders has criticised Boris’s blueprint. Their CEO Brian Berry said: "If there is no detail in the Strategy on how we can address the megatons of carbon lost through the leaky walls and roofs of our homes, it will have failed and the benefits of installing heat pumps risk being lost.” Rather than giving grants for heat pumps, many people would rather see grants to improve insulation first.

Furthermore, some critics believe that the government’s plans simply don’t go far enough. Mike Childs, the Head of Science at Friends of the Earth, has claimed that the government’s funding will only lead to 90,000 additional heat pump installations over the next three years. That’s merely a drop in our rising oceans. 

Sending a message

However, whilst there are some problems with the government’s heat and buildings strategy, at least the government is getting serious over climate change. Both the Boiler Upgrade Scheme and the controversial mortgage plans send a strong message: if you live in an inefficient home then you’ll pay for it. And if you have a gas-guzzling boiler then you’ll eventually pay for that, too. The problem, of course, is whether the public are prepared to pay the price. 

It’s also worth mentioning that, despite the headlines, we’re not going to see the end of gas boilers just yet. Nobody will be forced to remove their fossil fuel-fed friend. Instead, we’ll see a gradual decline that’s dictated by (a) how quickly the price of heat pumps falls, and (b) how soon new technologies like hydrogen boilers come to market. 

In the meantime, the government’s policy should give heat pump producers more confidence to invest. It also puts homeowners who care little about sustainability on notice. Therefore, perhaps we shouldn’t focus too much on critics gnashing their teeth? The path to net zero was never going to be easy but we’ll get there. After all, we have to.

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