A recent consultation revealed that the UK’s homes are responsible for 15% of its total carbon emissions, with 20% of households in England and 15% in Wales being private rentals. According to the report, private rentals are some of the least energy-efficient homes in the UK’s total housing stock, and an estimated 3.2 million have an EPC rating of D or below. The consultation proposed for all new tenancies from 1 April 2025 and all existing tenancies by 1 April 2028 to be required to have an EPC rating of C or higher. This was met with criticism from industry organisations who suggested that the target was unrealistic. This was due to a large proportion of housing stock requiring substantial improvements to meet this target and that Government funding must be increased to support this.
As part of its net-zero strategy, the government has said it is working with mortgage lenders to support homeowners in improving the energy performance of their properties. This means imposing targets for lenders, to help decarbonise the UK’s ageing and leaky housing stock.
In order to make the UK carbon-neutral by 2050, the UK Government will attempt to reduce greenhouse gas emissions in the UK’s domestic private rental sector. Starting with the introduction of EPC (Energy Performance Certificate) rules in 2018, ratings below E prohibit properties from being let without a valid exemption. Most recently in October 2021, the Government released new funding plans as part of its Heat and Buildings Strategy to help households reduce their carbon emissions. So what are those plans?
Ahead of COP26 in Glasgow, the Government released its Heat and Buildings Strategy and announced a new series of measures to help households become greener. The Government plans to deliver a Ten Point Plan required to achieve Net Zero heating. The following are extracts from the report regarding heating.
Intention to phase out the installation of new natural gas boilers from 2035.
Funding for the replacement of gas boilers is predicted to fall short of what is needed, while the viability of heat pumps is uncertain unless running costs can be made affordable enough for every homeowner, no matter their income level. Residential buildings pose difficulties as leaseholders are often limited in the improvements they are allowed to make to their flats, and it remains to be seen how the Government will tackle this. Without incentives and funding, many landlords will be unable to make the changes required to achieve an EPC rating of C by 2025 for new tenancies and 2028 for all tenancies.
Setting a clear ambition for the industry to reduce the costs of installing a heat pump by at least 25-50% by 2025.
This must ensure heat pumps are no more expensive to buy and run than gas boilers by 2030.
Improving heat pump appeal by continuing to invest in research and innovation.
The £60 million Net Zero Innovation Portfolio (NZIP) ‘Heat Pump Ready’ Programme will support the development of innovation across the heat pump sector, including improving the consumer experience in installing and using a heat pump.
Ensuring affordability by providing financial support to meet capital costs.
The ambition is to ensure that the costs of decarbonising heat and buildings fall fairly across society. Consumers who choose to switch to a heat pump will be supported in making the transition to a heat pump. A clean heat grant, called the Boiler Upgrade Scheme, to support the deployment of low-carbon heat in existing buildings. This will provide households with £5,000 grants when they switch to an air source heat pump or £6,000 when they switch to a ground source one.
Rebalancing energy prices to ensure that heat pumps are no more expensive to buy and run than gas boilers.
Current pricing of electricity and gas does not incentivise consumers to make green choices, such as switching from gas boilers to electric heat pumps. The Government will launch a Fairness and Affordability Call for Evidence on these options for energy levies and obligations to help rebalance electricity and gas prices and to support green choices, with a view to making decisions in 2022.
Significantly growing the supply chain for heat pumps to 2028.
To ensure the UK low-carbon heat market can be built sustainably towards the 1.7 million heating systems per year needed by 2035, further policy would be required to phase out the installation of new fossil fuel heating. This would mean growing the heat pump market and transitioning consumers in stages.
Ensuring all new buildings in England are ready for Net Zero from 2025
The Government’s ambition is to build 300,000 new homes a year by the mid-2020s. To enable this, they will introduce new standards through legislation (such as Building Regulations) to ensure new homes and buildings will be fitted with low-carbon heating and high levels of energy efficiency so that new buildings do not have to be retrofitted in the future.
Phasing out the installation of fossil fuel heating systems in properties not connected to the gas grid.
Ending the installation of high-carbon fossil fuels to heat homes that are not connected to the gas grid in England from 2026 and non-domestic buildings not connected to the gas grid from 2024, in particular, whether there are sectors or building types with specific needs that should be taken into account, for example, heritage buildings or those occupied by voluntary sector organisations.
Growing UK-manufactured technology and capabilities.
Scale-up UK production to help meet UK demand and we are aiming for a 30-fold increase in heat pumps manufactured and sold within the UK by the end of the decade.
Ensuring the electricity system can accommodate increased electricity demand and heat pumps can be quickly and affordably connected to the network.
Work with Ofgem, distribution network operators, and other local actors on the approach to planning the network in Great Britain and delivering smart, secure, cost-effective solutions.