U.K. Heat-Pump Plan Risks Driving Up Bills for Drafty Homes
(Bloomberg) -- A U.K. plan to accelerate the rollout of low-carbon heat pumps risks pushing up energy bills if funding isn’t given to improve drafty homes.
The government is touting heat-pump technology to wean households off gas boilers, but it’s expensive and only effective in well-insulated buildings. With Britain’s housing stock responsible for about a fifth of its greenhouse gases, improvements will be needed if planned emission cuts are to be achieved.
“There is a major energy-efficiency funding gap,” said Juliet Phillips, senior policy adviser at climate think tank E3G. That “could significantly undermine the U.K.’s ability to cut emissions from housing.”
Homeowners will be offered subsidies of 5,000 pounds ($6,900) to help them install heat pumps, but the GMB union has dismissed the funding as insufficient, saying running costs are currently higher for pumps than for gas boilers.
The 450 million pounds dedicated to the grants will be enough to pay for about 90,000 boiler-to-heat pump replacements, far short of Prime Minister Boris Johnson’s target of 600,000 a year by 2028.
Analysis by E3G shows that 80% of middle- and lower-income households who live in energy-inefficient housing don’t have access to existing government funding for insulation, which is currently focused on the fuel poor. That creates a public investment gap.
A spending review by Chancellor of the Exchequer Rishi Sunak at the end of the month may contain measures to address insulation more widely, Phillips said.
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