Industry bosses have slammed Boris Johnson’s plan to offer £5,000 grants to families to replace gas boilers with greener heat pumps as ‘nothing more than a middle class bung’.
Households will be offered the grants from April next year in a bid to encourage the shift to low-carbon heating systems, costing taxpayers in England and Wales at least £450million.
But the funding will cover just 90,000 heat pump installations over a three year period, far short of the Prime Minister’s goal of 600,000 installations a year by 2028.
Energy chiefs have criticised the way the grants scheme has been drawn up as they warned only wealthier families will be able to benefit.
They said that ‘the only people who can afford to take advantage are those who can put the other £5,000 in’ to meet the estimated £10,000 cost of installing a heat pump.
The idea of providing grants has been welcomed by some in the industry but there are fears the ‘level of funding is too low’ to prompt widespread adoption of the technology.
Meanwhile, the PM has ditched the idea of a total ban on gas boilers from 2035 after a furious backlash from Tory MPs and homeowners.
Instead, the Government has said it will set ‘an ambition that by 2035, no new gas boilers will be sold’.
The policies are contained in the Government’s new Heat and Buildings Strategy which was published today along with Mr Johnson’s wider plan for hitting a target of net zero emissions by 2050.
Mr Johnson addressed a global investment summit in a bid to secure commitments on climate change from major firms.
The announcements came amid signs of rising tension between Mr Johnson and Chancellor Rishi Sunak as the Treasury warned of ‘diminishing returns’ from green investment – at a time when the UK’s post-Covid economic recovery has slowed amid rising inflation and widespread shortages.
Prince Charles has increased the pressure on ministers to act on climate change by describing how his grandson Prince George has been learning how global warming is causing ‘the big storms, and floods, the droughts, fires and food shortages’ around the world.
Speaking to business moguls at the Science Museum in London this morning, Mr Johnson said hydrogen would be a significant part of the solution to replacing fossil fuels. ‘To drive a digger or a truck or to hurl a massive passenger plane down a runway, you need what Jeremy Clarkson used to call ”grunt” – I think there may be a technical term for it – but ”grunt”.
‘Hydrogen provides that grunt, so we are making big bets on hydrogen, we are making bets on solar and hydro, and, yes – of course – on nuclear as well, for our baseload.’
Boris Johnson is pressing ahead with plans to phase out the installation of conventional gas boilers in the next 15 years, despite Conservative warnings that the move could spark fury among the public
The boiler plans are outlined in the Government’s long-awaited ‘heat and buildings strategy’, published today (file image)
Mr Johnson wants households to shift from gas boilers to greener heat pumps which run on electricity rather than gas
There are signs of rising tensions between the PM and Chancellor Rishi Sunak as the Treasury warned of ‘diminishing returns’ from excessive green investment
Mr Johnson chatted to Microsoft billionaire Bill Gates on stage today as he asked industry leaders to commit funding to decarbonising the world economy – insisting ‘green is good, green is right’.
What is a heat pump, how much do they cost and will they reduce energy bills?
– What is a heat pump?
An air source heat pump looks like an air conditioning unit on the outside of buildings, and it works a bit like a fridge in reverse, using electricity to extract energy from the outside air to provide heating and hot water for homes. There are also heat pumps that draw energy from the ground or water. Because they are extracting heat from the environment – which they can do even at low outside temperatures – they produce around three times the energy they use, making them much more efficient than a gas boiler. British electricity is increasingly powered by low carbon sources such as wind, making heat pumps a clean alternative to burning gas, while they also cut local air pollutants emitted by boilers such as nitrogen dioxide.
– How much are they?
While costs vary, installing a new system can cost around £10,000 on average. It is still a niche industry and it is expected costs will fall as the technology becomes more mainstream. Octopus Energy has previously said it expects to nearly halve the cost within 18 months, and has announced it will install heat pumps for about the same cost as gas boilers once the Government’s £5,000 grant scheme launches next April.
– How different are they to run?
The main difference is you do not get that immediate boost you can get with gas, when you feel cold and you fire up the boiler. That is because a heat pump heats water in the radiators to a lower temperature than a gas boiler, so it warms a house more slowly. But with a heat pump, the system works out the most efficient way to keep the house to the temperature you want and gets on with it.
– Do you need a well-insulated home to run one?
All heating technologies work more efficiently and save you money if your home is well insulated, and improving insulation to save energy is a key part of cutting emissions from buildings. Heat pumps work well in homes that are already reasonably well insulated, while if you live in a leakier house, such as a Victorian terrace, putting in some measures such as loft insulation and double glazing could help keep costs down in running a heat pump – just as they would if your home is heated by a gas boiler.
– What other changes might I need to make, such as swapping out radiators or putting in underfloor heating?
Because radiators on heat pumps operate at a lower temperature than with gas, you might need to swap out a few of the oldest, single-panel radiators your home might have to ensure they are big enough to heat the room sufficiently. They can normally be replaced with double- or triple-panelled radiators that fit in the same spot. Underfloor heating works very well with heat pumps as it operates at a lower temperature than radiators, so it will continue to work if you have it, or if you are doing a wider refurb you could think about putting it in. It is not necessary to install it, however. Currently, you do need a water tank for heating up your hot water, although new technology that stores heat for hot water in other ways could change that.
– Do you save money from running one?
While there are some ‘time of use’ tariffs, which allow people to use the electricity for running their heat pumps when it is off peak and therefore cheaper, most people will not be saving money at the moment. That is because, although heat pumps use much less energy to create the same amount of heating, electricity is around three times the price of gas. Part of the issue is that there are higher environmental levies on electricity than gas, adding 23% to electricity bills and less than 2% on gas, to pay for things such as subsidies for renewables, which were brought in to help clean up the electricity system. By saying it is aiming to make heat pumps cost the same to run as fossil fuel boilers by 2030, as well as to buy them, the Government has indicated it will address this issue, but there are no details as yet.
The problems with the PM’s plan to scrap gas boilers in 14 years
What the PM wants: No more gas boilers from 2035.
How much it will cost: £500million of taxpayers’ cash on new hydrogen tech
High costs of alternatives: A new gas-fired boiler costs about £1,500 with installation, compared to £19,000 for a ground source heat pump or £10,000 for an air source heat pump
Still in development: Hydrogen boilers are not even on the market yet, with Worcester Bosch making a prototype – and their cost is therefore unknown
Effect on house prices: Boilers are normally installed in new builds before people move in, meaning the cost would be factored into the house price
The Government’s £450million Boiler Upgrade Scheme will see grants of up to £5,000 handed out to encourage people to replace gas heating systems with a heat pump.
The aim of the grant is to make low-carbon heating systems ‘cost the same as a gas boiler now’.
A new £60million Heat Pump Ready programme will also be rolled out to provide cash for ‘pioneering heat pump technologies’.
The Government wants to hit a target of 600,000 heat pump installations a year by 2028.
Switching to low carbon heating in the coming years will cut emissions, and reduce the UK’s dependency on fossil fuels and exposure to global price spikes in gas, the Government said.
Government sources have also confirmed ministers will press ahead later this year with a plan to pile new ‘green’ levies on to gas bills.
Levies on electricity will be cut in a bid to persuade consumers to switch to greener energy.
Mike Foster, chief executive of the Energy and Utilities Alliance, said the £5,000 grant for heat pumps amounted to a ‘middle class bung’.
He said: ‘If we accept the cost is currently £10,000 to install and the grant is £5,000, the only people who can afford to take advantage are those who can put the other £5,000 in.
‘By definition that is not the fuel poor. With schemes like this it is always those who intended to fit a heat pump and are affluent enough to afford one who get the subsidy, when what England is crying out for is a properly government-funded energy efficiency roll-out programme.
‘This is nothing more than a middle class bung.’
Mr Foster said for the same amount of annual funding – £150million – the Government could fit loft insulation in half a million homes, saving each household £135 a year while also removing 290,000 tonnes of carbon emissions each year.
He said replacing 30,000 gas boilers ‘will remove only 48,000 tonnes of carbon each year’.
Jan Rosenow, Europe director at the Regulatory Assistance Project, which aims to accelerate the shift to clean, reliable and efficient energy, said there were many positive elements to the strategy, with the plans for a boiler phase out setting an example to other countries in the run up to Cop26 climate talks.
He said: ‘Providing grants for installing heat pumps is essential as they are more expensive than gas boilers, but the level of funding is too low.’
Friends of the Earth’s Mike Childs said the Government’s plans were ‘quite modest’.
He added: ‘Housing is one of the hardest sectors to decarbonise but the Government is making it all the more difficult by leaving half its tools in the toolbox, with unambitious policies and inadequate funding.’
Speaking to broadcasters this morning, International Trade Secretary Anne-Marie Trevelyan confirmed that the Government is stopping short of introducing a future ban on gas boilers.
She told BBC Radio 4’s Today programme: ‘At the moment we’re encouraging the market to drive those changes.’
However, she did not rule out forcing the move later.
‘In the short term, yes, of course this is a voluntary scheme,’ she said.
‘There will be a point at which that changes but, yes, for now that’s the case.’
The Government today set out its plans to help the UK reduce its carbon emissions to hit a ‘net zero’ target by 2050.
Writing in The Sun, the Prime Minister vowed ‘the greenshirts of the boiler police’ won’t kick down doors to rip out dirty gas boilers and said no one will have their ‘trusty old combi’ torn out by ‘sandal-clad’ inspectors.
‘We’re going to make carbon-free alternatives cheaper to install so that when you or your landlord next come to replace your boiler it makes more sense to go with a cleaner, more efficient replacement that you know will help the planet,’ Mr Johnson added.
Mr Johnson has announced £9.7billion of overseas investment in the UK, creating 30,000 jobs.
The deals with businesses will support growth in areas such as wind energy, sustainable homes and carbon capture.
The Prime Minister hosted business leaders including Microsoft co-founder Mr Gates at the Global Investment Summit at the Science Museum in London this morning to announce the investment.
Yesterday also saw Ford reveal it is investing £230million to transform its Halewood factory on Merseyside to help build a new generation of zero-emissions cars.
Its first electric vehicle parts hub in Europe will safeguard 500 jobs.
Prince Charles introduced a documentary ahead of the Cop26 climate change summit in Glasgow in November.
He was shown holding a revolving earth in the footage, telling viewers: ‘Your future depends upon the future of the planet.’
The Sky Kids documentary Cop26: In Your Hands features six young activists who highlight the impact of climate change on their corners of the Earth. The prince tells viewers: ‘I’m old enough to have a grandson.
‘Like you, he is learning how climate change is causing the big storms, and floods, the droughts, fires and food shortages we are seeing around the world.’
Charlie Mullins from Pimlico Plumbers has warned that putting new energy sources into 30million-plus homes ‘would keep the country’s current crop of heating engineers busy for a hundred years’.
There are also major questions about how some of these new solutions such as ground source heat pumps, can work for the millions of small homes and flats in Britain’s cities because they need a hole between 50ft and 300ft deep – or long trenches measuring around 7,000sqft in the garden or grounds.
A leaked Treasury briefing ahead of the COP26 summit says the spending needed to achieve Net Zero is ‘uncertain’ and the positive impact of ‘ever more investment’ in greening the economy is likely to reduce.
The decision came as Prince Charles (pictured in Sky documentary) warned about the consequences of climate change, and told how his grandson Prince George learning how global warming was causing ‘the big storms, and floods, the droughts, fires and food shortages’ around the world
How we are increasingly – and so expensively – dependent on gas
Ministers are desperate to reduce Britain’s dependence on gas as soaring wholesale prices have sent domestic and business energy bills rocketing, writes Harriet Dennys.
An analysis of the UK’s energy supply shows how gas is responsible for around 40 per cent of the overall mix.
Wind power provided almost a fifth of our electricity last month but its contribution fluctuates throughout the year
Wind power provided almost a fifth of our electricity last month but its contribution fluctuates throughout the year. It hit a peak of 26 per cent in February.
Our electricity comes from several other sources: nuclear, hydro, biomass, imports and the sun. But amounts vary considerably depending on the season, weather and time of day.
Solar power peaks in June, providing an average 7 per cent of our needs, but was just 0.6 per cent last December. Last week, the sun supplied 3.5 per cent of the UK’s energy.
As gas prices soared last month, old coal plants had to be fired up to help meet electricity needs. Coal, which Ministers want to phase out, contributed two per cent of our electricity mix in September, up from 0.5 per cent a year previously.
Imports increased from seven per cent to ten per cent over the same period, and hydroelectric power doubled to one per cent.
Britain’s over-reliance on gas is because 85 per cent of homes need it for heating. More than half of our gas is imported – it comes from Russia, Norway, the Netherlands and Belgium through pipelines.
The document, which according to the Observer accompanied a presentation to key groups outside government, also cautioned that tax rises could be required to balance the ‘erosion of tax revenue from fossil-fuel related activity’.
As frictions bubble up between the two most powerful figures in government ahead of the Budget on October 27 and crucial summit, Treasury officials have also been complaining about ‘economic illiteracy’ at No10 over lavish spending promises and the danger of inflation running out of control.
There are claims that Mr Sunak privately lamented the ‘sh**show’ in Downing Street at the height of the pandemic.
Meanwhile, the Chancellor also faces a wave of counter-briefing, with swipes that he is turning into Bond villain ‘Dr No’ and has been ‘rattled’ by the possibility that he could be replaced.
The infighting emerged as the PM tries to position the UK at the forefront of the battle against climate change, with the UN summit taking place in Glasgow in a fortnight.
The feuding hit a new level last week as No11 brutally slapped down Kwasi Kwarteng over his public suggestion of a bailout for energy-intensive firms struggling with soaring gas prices – only to be effectively overruled by Mr Johnson.
An admirer of Mr Sunak told the Sunday Times that the relations between the Chancellor and the PM were now starting to resemble those between Tony Blair and Gordon Brown.
However, they pointed out that in this case there was no doubt about who was in charge of government policy.
‘I’ve been watching the Blair-Brown documentary and I’m worried we are falling into the same thing with Boris and Rishi only this time it is the prime minister with the ”great clunking fist”,’ they said.
Tory aides pointed out that new Foreign Secretary Liz Truss openly covets the Treasury job and Mr Sunak is ‘rattled’.
‘Rishi has become Dr No, while Liz is Mrs Yes, Yes, Yes,’ a former minister said.
Rumours have been circulating that Mr Johnson appointed 6ft 5in Simon Clarke as Treasury Chief Secretary partly as a joke at the expense of the rather more diminutive Mr Sunak.
One senior Tory told the Sunday Times that a crunch moment is approaching on the PM’s free-spending habits.
‘The moment is coming, a bit like Nigel Lawson and Mrs T, where he will have to make a decision as the chancellor whether he is going to continue going along with it,’ they said.
A Treasury spokesperson said: ‘The Government is committed to tackling climate change and the Prime Minister has set out an ambitious Ten Point Plan to help us achieve that.
‘The Treasury is playing a crucial role in this effort, by allocating £12billion to fund the Ten Point Plan, setting up the UK Infrastructure Bank to invest in net zero, and committing to raise £15billion through our Green Gilt for projects like zero-emissions buses, offshore wind and schemes to decarbonise homes.’
How much will gas boiler alternatives cost you?
GROUND SOURCE HEAT PUMPS (£14,000 – £19,000)
Ground source heat pumps use pipes buried in the garden to extract heat from the ground, which can then heat radiators, warm air heating systems and hot water.
They circulate a mixture of water and antifreeze around a ground loop pipe. Heat from the ground is absorbed into the fluid and then passes through a heat exchanger.
Installation costs between £14,000 to £19,000 depending on the length of the loop, and running costs will depend on the size of the home and its insulation.
Users may be able to receive payments for the heat they generate through the Government’s renewable heat incentive. The systems normally come with a two or three year warranty – and work for at least 20 years, with a professional check every three to five years.
Ground source heat pumps circulate a mixture of water and antifreeze around a ground loop pipe. Heat from the ground is absorbed into the fluid and then passes through a heat exchanger, and running costs will depend on the size of the home
AIR SOURCE HEAT PUMPS (£11,000)
Air source heat pumps absorb heat from the outside air at low temperature into a fluid to heat your house and hot water. They can still extract heat when it is as cold as -15C (5F), with the fluid passing through a compressor which warms it up and transfers it into a heating circuit.
They extract renewable heat from the environment, meaning the heat output is greater than the electricity input – and they are therefore seen as energy efficient.
There are two types, which are air-to-water and air-to-air, and installing a system costs £9,000 to £11,000, depending on the size of your home and its insulation.
A typical three-bedroom home is said to be able to save £2,755 in ten years by using this instead of a gas boiler.
Air source heat pumps absorb heat from the outside air at low temperature into a fluid to heat your house and hot water. They extract renewable heat from the environment, meaning the heat output is greater than the electricity input
HYDROGEN BOILERS (£1,500 – £5,000)
Hydrogen boilers are still only at the prototype phase, but they are being developed so they can run on hydrogen gas or natural gas – so can therefore convert without a new heating system being required.
The main benefit of hydrogen is that produces no carbon dioxide at the point of use, and can be manufactured from either water using electricity as a renewable energy source, or from natural gas accompanied by carbon capture and storage.
A hydrogen-ready boiler is intended to be a like-for-like swap for an existing gas boiler, but the cost is unknown, with estimates ranging from £1,500 to £5,000.
The boiler is constructed and works in mostly the same way as an existing condensing boiler, with Worcester Bosch – which is producing a prototype – saying converting a hydrogen-ready boiler from natural gas to hydrogen will take a trained engineer around an hour.
This graphic from the Government’s Hy4Heat innovation programme shows how hydrogen homes would be powered
SOLAR PHOTOVOLTAIC PANELS (£4,800)
Solar photovoltaic panels generate renewable electricity by converting energy from the sun into electricity, with experts saying they will cut electricity bills.
Options include panels fitted on a sloping south-facing roof or flat roof, ground-standing panels or solar tiles – with each suitable for different settings. They are made from layers of semi-conducting material, normally silicon, and electrons are knocked loose when light shines on the material which creates an electricity flow.
The cells can work on a cloudy day but generate more electricity when the sunshine is stronger. The electricity generated is direct current (DC), while household appliances normally use alternating current (AC) – and an inverter is therefore installed with the system.
The average domestic solar PV system is 3.5 kilowatts peak (kWp) – the rate at which energy is generated at peak performance, such as on a sunny afternoon. A 1kWp set of panels will produce an average of 900kWh per year in optimal conditions, and the cost is £4,800.
Solar photovoltaic panels (left) generate renewable electricity by converting energy from the sun into electricity. Solar water heating systems (right), or solar thermal systems, use heat from the sun to warm domestic hot water
SOLAR WATER HEATING (£5,000)
Solar water heating systems, or solar thermal systems, use heat from the sun to warm domestic hot water.
A conventional boiler or immersion heater can then be used to make the water hotter, or to provide hot water when solar energy is unavailable.
The system works by circulating a liquid through a panel on a roof, or on a wall or ground-mounted system.
The panels absorb heat from the sun, which is used to warm water kept in a cylinder, and those with the system will require a fair amount of roof space receiving direct sunlight for much of the day to make it effectively.
The cost of installing a typical system is between £4,000 and £5,000, but the savings are lower than other options because it is not as effective in the winter months.
BIOMASS BOILERS (£5,000 – £19,000)
Biomass heating systems can burn wood pellets, chips or logs to heat a single room or power central heating and boilers
The renewable energy source of biomass is generated from burning wood, plants and other organic matter such as manure or household waste. It releases carbon dioxide when burned, but much less than fossil fuels.
Biomass heating systems can burn wood pellets, chips or logs to heat a single room or power central heating and hot water boilers.
A stove can also be fitted with a back boiler to provide water heating, and experts say a wood-fuelled biomass boiler could save up to £700 a year compared to a standard electric heating system.
An automatically-fed pellet boiler for an average home costs between £11,000 and £19,000, including installation, flue and fuel store. Manually fed log boiler systems can be slightly cheaper, while a smaller domestic biomass boiler starts at £5,000.