Thank you for contacting me about heat pumps.
One of the hardest things to decarbonise is heat production. It is thought by some that heat pumps are central to achieving net zero. The Government takes the role heat pumps can have in driving down carbon emissions very seriously and has set an ambitious target of 600,000 heat pump installations a year by 2028.
The Department for Business, Energy and Industrial Strategy (BEIS) is supporting heat pump deployment through both the Domestic and Non-Domestic Renewable Heat Incentive (RHI). As of November 2020, the total number of Non-Domestic RHI accredited applications for heat pump based installations was 2,500 and 62,492 in the Domestic RHI.
BEIS is also providing support through the Future Homes Standard. This will ensure that new homes are built zero carbon-ready without the need for costly retrofitting and introduce a new market-based policy which puts industry at the heart of efforts to develop the heat pump market. This is evidence of the Government’s commitment to phase out the installation of high-carbon fossil-fuel heating off the gas grid through targeted regulation, and a range of other policies such as the Home Upgrade Grant and Social Housing Decarbonisation Fund. I understand further consultations on the market mechanism and off-gas-grid regulations will be published in due course, alongside the forthcoming Heat and Buildings Strategy.
As part of the £1.5 billion Green Homes Grant scheme, the Government will fund up to two-thirds of the cost of installing low-carbon heat (including air source, ground source and hybrid heat pumps) and energy efficiency measures in homes. Under the scheme, the Government aims to retrofit 600,000 homes in England and to date over 60,000 applications have been received.
Responding to concern that bigger heat pump schemes will become ineligible for a grant, it is true that there are plans to restrict a specific grant to smaller projects. This is because they can struggle with the initial outlay associated with installing a heat pump. However, there are two major new schemes for larger heat pump projects.
A new £270 million Green Heat Network Fund will fund large heat pumps, solar thermal installations and waste-heat recovery in heat networks. The heat pump sector was invited to give its view on how this fund can best operate and the Government is analysing the feedback.
In July 2020, £1 billion of funding was committed to a new Public Sector Decarbonisation Scheme to upgrade public sector buildings, including schools and hospitals. Heat pumps may well play a big part in this. Park-based heat pump schemes have the potential to reduce carbon emissions and generate revenue.
Support for the size of installations and the number of installations per property must be got right. I am sure we can agree, looking at schemes elsewhere, that officials alone do not have all the answers.
The argument for the 45kW cap is that this will target support where upfront costs are a particular barrier in transitioning to low-carbon heat. Typically, these installations are in households or small and medium-size enterprises. Many bigger schemes need support too and I am sure you are aware that the consultation expressly seeks views on this very point. The consultation has closed, and the Government is analysing the responses.
Officials have met with representatives of the 'Pump it Up' campaign in which there was a discussion of the market for large heat pump projects.
You mention the efficiency of heat pumps and I am confident that with the right support they will play a massive role in Britain in decarbonising heat.
Thank you again for taking the time to contact me.
Craig Whittaker MP