Following yesterday’s announcement of the Warm Homes Plan, research and innovation foundation Nesta has published its analysis that shows that it could save a typical household that invests in home upgrades £1,000 on its energy bill. The analysis finds that households that get a heat pump, solar panels and a battery could see their yearly bill from April fall from around £1,670 to around £670 under the changes.
Nesta’s new analysis models the expected annual energy bill for a combination of solar PV, battery storage and electric heat pumps. By looking at these technologies against a range of current and emerging energy tariffs, the analysis projects the real-world energy bill impact of these changes for households moving away from fossil fuels. The study finds that across every low carbon technology combination modelled, households can expect to see a reduction in their annual energy bills compared to a typical dual-fuel home that is on a standard tariff with a gas boiler.
Madeleine Gabriel, director of sustainable future at Nesta, comments: “Increasing access to technologies that can help people live more sustainably comes with significant additional benefits. Solar panels and batteries are smart choices for people looking to cut their bills, and heat pumps also ensure people can enjoy a more comfortable, consistently warm home.”
Missing pieces
Despite such potential savings, more industry stakeholders have been responding to yesterday’s government announcement and have expressed disappointment that it has failed to address some critical issues – such as the relative high cost of electricity and the need to address the commercial sector. There are also concerns that the potential carbon savings from hybrid systems have been overlooked.
Jeff House, director of external affairs & policy at Baxi, says: “At face value, the confirmation of £15bn allocated budget to support the delivery of the plan is welcome. Dig deeper into the detail, however, and there are some aspects which are disappointing. Firstly, there is no mention of the role that hybrid heat pump systems can play in the heat transition. There is an ever-growing body of evidence to support the roll out of this technology in the UK and effective policy examples in EU member states to learn from.
“Secondly, there is insufficient detail or action on reducing electricity pricing, beyond what has been previously announced. A critical factor to mass market uptake of heat pumps and electrification will be the spark gap; more work is needed here if we are to achieve the stated ambition of 450,000 annual heat pump installations by 2030.
Russell Dean, Deputy Divisional Manager at Mitsubishi Electric, comments: “Reducing the price of electricity versus the volatility of gas and oil prices will be key to bringing down electricity prices and making heat pumps more affordable to. Not addressing this is the biggest opportunity missed for the residential sector, and the biggest challenge to increasing the uptake of more heat pumps now.
“Whilst the plan offers much for households and domestic properties, support for businesses and commercial buildings remains extremely limited. The commercial sector continues to be held back by little to no governmental, regulatory, or legislative incentive to decarbonise. The lack of commercial focus signifies a missed opportunity to tackle the UK’s approximately 2 million non-domestic buildings, and any genuinely transformative action plan must address this.”
The Building Controls Industry Association (BCIA) has also expressed disappointment that the Plan includes no new policies or funding commitments to support the decarbonisation of non-domestic buildings. The Association’s President Stacey Lucas, comments: “Given the scale of emissions from non-domestic buildings, it is deeply disappointing to see no new policies or funding set out for this sector in today’s Warm Homes Plan. The Climate Change Committee has been clear about the growing policy gap, and businesses and public sector bodies are already struggling with high energy costs. While it is positive to see the Government intends to explore private finance models, without a clear, immediate strategy for non-domestic buildings we risk missing both our climate targets and the opportunity to deliver cost and health benefits.”
