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Think tank calls on government to establish a comprehensive Home Improvement Plan to drive low-carbon heating and energy efficiency

Heat pumps combined with high energy efficiency standards should be central to a national strategy to revolutionise home heating and radically reduce the UK’s carbon consumption, according to a new IPPR report.

IPPR estimates that at least 12 million homes across England alone will need to be fitted with heat pumps and energy efficiency measures, such as insulation, over the next 30 years for the UK to meet its net zero targets.

However, the government is supporting the installation of less than 2 per cent of the heat pumps that are needed each year if the UK is to meet its 2050 net zero target.

The think tank warns that, whilst the recently announced £3 billion for energy efficiency is welcome, this is only a first step and clear support is needed to decarbonise the way we heat our homes, in addition to making them more energy-efficient. Across England it would take closer to £10.6 billion a year from both public and private investment until 2030, and a further £7 billion a year from 2030 to 2050, to meet the pace and scale of action needed. The call comes as new polling for IPPR reveals:

More than 2 in 5 (43 per cent) of UK adults who have considered installing energy improvement measures, but haven’t, cite the high upfront costs as the most common reason for not doing so.
Nearly half of the UK public say that reducing carbon emissions from housing should be paid for through either general taxation (30 per cent) or government borrowing (19 per cent), compared with just one in 10 (11 per cent) who support higher energy bills.

This scale of investment in a combination of heat pumps and energy efficiency, as well as in local heat networks, comes with considerable rewards beyond helping to tackle the climate crisis, according to IPPR. These include the creation of 275,000 urgently needed jobs in England alone, and the potential to lower household energy bills.

The progressive think tank also warns that any public investment risks being wasted unless it is guided by a comprehensive Home Improvement Plan from central government. Local government must also be empowered and funded to build the capacity to drive area-based initiatives and deliver retrofit upgrades, street by street.

At the core of this plan should be the significant scale up of heat pumps – electric devices that draw in heat energy from air outside the home and distribute it within – replacing existing central heating systems. Heat networks that distribute heating around a neighbourhood from a central local source are also considered worthwhile investments by IPPR.

These measures will need to be combined with a larger rollout of energy efficiency measures, like loft and wall insulation, according to IPPR.

The report calls on the government to choose a clear ‘technology pathway’ now so that supply chains and processes can be quickly scaled up to bring overall costs down. The report argues that, while there will be a role for different technologies, heat pumps should be the dominant device used over hydrogen boilers – an alternative option favoured by some. IPPR argues that heat pumps are already readily available, are likely to be cheaper to run, and do not rely on natural gas imported in large quantities from overseas.

Building the necessary supply chains, scaling-up the workforce and developing the skills needed to deliver a nationwide decarbonisation programme will also be key. IPPR suggest that the government should prioritise social housing for the first wave of retrofits, as this would build on progress already made in the sector. Rapid uptake in the social rented sector and scaled-up supply chains would also help attract more private investment into retrofitting, according to the think tank.

The comprehensive Home Improvement Plan proposed by IPPR to finance and implement this low-carbon housing revolution, would require the government to:

Establish a Retrofit Fund for England - £5.3 billion per year through to 2030 and £3.5 billion after this through to 2050. The government should work with the private sector to match this amount as part of a ‘blended’ funding model. The Bank of England should work with financial institutions to reduce the perceived risk of retrofit activity and so encourage more private investment.
Provide households with grants to cover at least half the cost of heat pump installation, with the remainder subject to means-tested support.
Ratchet up Minimum Energy Efficiency Standards gradually for the private rented sector to an EPC (Energy Performance Certificate) of at least B by 2030. Council tax rates or stamp duty relief could also be used to incentivise greater energy efficiency.
Scale up existing support to create a widely accessible, dedicated advice service to provide clear and consistent advice to households on how to apply for support and use the kit once it is installed.
Invest in a large-scale training programme for clean heat installers – to build the capacity needed for heat pump and energy efficiency installation at scale and create hundreds of thousands of jobs.

Jonathan Webb, IPPR Research Fellow, said:

“A low-carbon heat strategy built around heat pumps would provide a tech-ready plan for decarbonising our homes. Adopting this technology now, and supporting its uptake, will allow industry to focus on the challenge ahead and enable the training of workers to begin in earnest. This will unlock job creation and allow the government to drastically accelerate the decarbonisation of our homes.”

Joshua Emden, IPPR Research Fellow, said:

“The government’s announcement on energy efficiency was a very welcome step in the right direction. But we also need to focus on scaling up the low-carbon technologies that will heat our homes, not just making them more efficient. A new Home Improvement Plan would maximise the potential for savings on energy bills by going further on the good work that’s been done on energy efficiency and pairing this with low-carbon heating technologies like heat pumps.”

ENDS

CONTACT

David Wastell, Head of News and Communications: 07921 403651 / 020 7470 6146 d.wastell@ippr.org

Robin Harvey, Digital and Media Officer: 020 7470 6154 / 07779 204798 r.harvey@ippr.org

Jonathan Webb and Joshua Emden are available for interview

NOTES TO EDITORS

The IPPR paper, All Hands to the Pump: a clean heat plan for England by Jonathan Webb, Joshua Emden and Luke Murphy will be published at 0001 on Wednesday 15 July. It will be available for download at: http://www.ippr.org/research/publications/all-hands-to-the-pump
A heat pump uses electricity to transfer thermal energy; taking in heat from cold spaces external to a building and transferring it into the air or water circuits internal to that building. The mechanism is analogous to that within a fridge.
Heat networks are insulated hot-water pipes that run underground from a heat generation plant, often at neighbourhood level, to any combination of residential, commercial or public buildings.
Overall costs based on cost estimates of £26,300 per home given in the Committee on Climate Change UK housing: fit for the future? for a combination of air-source heat pumps and high energy efficiency measures. Costs of ground-source heat pumps not included within modelling. Number of homes based on IPPR analysis of the English Housing Survey to identify homes that are below an Energy Performance Certificate (EPC) of C and would therefore benefit most in terms of running costs. Figures are adjusted based on the number of such homes in England that may benefit from heat networks rather than heat pumps.
Savanta ComRes interviewed 2,120 UK adults between 19th and 22nd June 2020. Data were weighted to be representative of UK adults. Savanta ComRes is a member of the British Polling Council and abides by its rules. Full polling details are available on the IPPR website.
IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is the UK’s only national think tank with a truly national presence. www.ippr.org