Analysis: 3m homes must install clean heating such as heat pumps this Parliament

Report by Nesta highlights priorities for new Government to boost low carbon heating which if implement could save families £400 a year on bills.

Millions more heat pumps will have to be installed in this Parliament
Millions more heat pumps will have to be installed in this Parliament (Alamy Stock Photo)

One in 10 households – around three million homes – need to install heat pumps or other low carbon heating during this parliament to meet climate targets, analysis has found.

A report by innovation charity Nesta sets out a plan for the new Government to boost clean heating, which it says would save the average family switching to a heat pump £400 a year on their energy bills.

Nesta warns that with homes contributing 14% of the UK’s greenhouse gases, meeting targets to cut emissions to end the UK’s contribution to climate change cannot be done without decarbonising heating.

Nesta’s report found the UK installed only an estimated 250,000 heat pumps between 2020-2024, while 25.5 million homes still use oil or gas boilers.

It warns that policy U-turns and delays by the previous government – such as scrapping higher energy efficiency standards for landlords and delaying the phase-out of boilers in off-grid homes – have left the UK around 15% short of the emissions savings from homes needed to meet climate targets.

Some three million households – or one in 10 – need to switch to heat pumps and other low-carbon heating systems such as district heating over the life of this Parliament, Nesta said.

That would mean a 12-fold increase in installations compared to the last five years, the charity said.

Its report recommends a series of actions the Government should take to get back on track, with priorities for the first 100 days including rebalancing energy bills.

This would stop green levies driving up electricity prices relative to gas so that over their lifetime, electric heat pumps would cost the same as gas boilers.

Nesta also argues for a new national agency to administer government heat and efficiency schemes and support local authorities with the shift, and for the launch of pilots of neighbourhood delivery schemes that could help many homes in an area switch to low-carbon heat at the same time.

Co-ordinated neighbourhood switching could involve installing shared heating infrastructure such as heat networks, or other collective switching schemes such as group buying that lower upfront costs and boost take-up.

Nesta also calls for the new Government to provide certainty by swiftly ruling out hydrogen for home heating and clarifying goals for phasing out new boilers – a controversial area in the run-up to the election.

The charity says if all the policy changes outlined in its report were put in place, a typical household switching to a heat pump would see their energy bills fall by £400 a year.

It also calls for improvements in action on fuel poverty, and for social housing and fuel-poor households to have fully funded low-carbon heating installation.

Madeleine Gabriel, director of sustainable future at Nesta, said: “The new UK Government will need to reverse the drift away from energy policies that ensured we would meet the UK’s net zero targets.

“It has inherited a big problem on home heating and will need to take urgent action.

“The good news is that it is possible to change course on the current approach and much can be accomplished rapidly, including setting out proposals to rebalance energy bills to reduce the relatively high cost of electricity.

“This would stop people paying an unnecessary premium for going green.”

Marcus Shepheard, co-author of the report added: “If we get this right the prize is huge and transformative.

“It means energy security for the country as a whole, and better, warmer homes that are cheaper to run for millions of people.”

Charles Wood, deputy director of industry body Energy UK, said a co-ordinated approach under the new Government was essential to accelerate progress – adding Nesta had “rightly highlighted” some of the most important elements needed for the rapid delivery of low-carbon heat.

A Department for Energy Security and Net Zero spokesperson said: “The energy shocks of recent years have shown the urgent need to upgrade British homes and secure our energy independence.

“Our Warm Homes Plan will support investment in insulation and low carbon heating – upgrading millions of homes over this Parliament.

“By providing £13.2 billion of investment to deliver this plan, we will cut bills, reduce fuel poverty and get the UK back on track to meet our climate goals.”