Source · Select Committees · Public Accounts Committee
Thirty-Seventh Report - Decarbonising home heating
Public Accounts Committee
HC 653
Published 26 May 2024
Recommendations
8
Accepted
Upfront heat pump installation costs remain too high for many households despite grants.
Recommendation
Grants under the Boiler Upgrade Scheme are available to all households irrespective of income. While other schemes are available for low income households, such as the Social Housing Decarbonisation Fund, Home Upgrade Grant and the Energy Company Obligation, DESNZ explained …
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Government Response Summary
Government agrees with the recommendation and commits to writing to the Committee by Spring 2025 upon publication of interim findings from the Boiler Upgrade Scheme evaluation, detailing heat pump uptake among different socio-economic groups.
HM Treasury
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9
Accepted
Boiler Upgrade Scheme's universal grants risk "deadweight" for affluent heat pump adopters.
Recommendation
We asked DESNZ whether heat pumps were being installed by people who may have switched to a heat pump anyway, particularly more affluent households. DESNZ accepted that the universal nature of the Boiler Upgrade Scheme raised a prospect of “deadweight”, …
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Government Response Summary
Government agrees with the recommendation and commits to writing to the Committee by Spring 2025 upon publication of interim findings from the Boiler Upgrade Scheme evaluation, detailing heat pump uptake among different socio-economic groups.
HM Treasury
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10
Acknowledged
High electricity prices make heat pumps more expensive to run than gas boilers.
Recommendation
DESNZ recognised that the cost of running heat pumps was also a key barrier to heat pump adoption. It explained that, as they are based on electricity, heat pumps are more expensive to run than fossil fuel boilers because of …
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Government Response Summary
Government agrees with the recommendation to address running costs but defers an implementation date, stating they are considering ways to reduce costs and funding an innovation programme to improve heat pump performance, without specific commitments on the electricity-gas price ratio.
HM Treasury
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11
Deferred
DESNZ plans to rebalance electricity and gas costs have been substantially delayed.
Recommendation
DESNZ plans to work on rebalancing the costs of electricity and gas, but it said that doing so is difficult because of large structural issues in the sector. It had aimed to rebalance costs to some extent by moving levies …
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Government Response Summary
The government agrees with the recommendation to rebalance electricity and gas costs but defers the implementation date, stating it is dependent on further ministerial steers. It confirms it is considering ways to lower running costs for low-carbon technologies and highlights existing innovation programs.
HM Treasury
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12
Deferred
DESNZ removed insulation requirements for Boiler Upgrade Scheme grants to simplify applications.
Recommendation
Households can face a range of decisions when looking to install a heat pump. One such decision is whether to improve insulation to reduce energy usage and emissions. At the time of our evidence session, households were required to meet …
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Government Response Summary
The government agrees with the implied recommendation to simplify the heat pump installation process but defers the implementation date, stating it is subject to ministerial steers. It references existing consumer advice tools and commits to further improving the heat pump landscape in a future Warm Homes Plan.
HM Treasury
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13
Deferred
DESNZ removed insulation requirements for heat pumps, making upgrades optional for homeowners.
Recommendation
We asked DESNZ why it had decided to change the minimum insulation standards required for heat pumps, and what impact it expected this decision to have. DESNZ told us that government had decided to leave insulation improvements as a choice …
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Government Response Summary
The government agrees with the implied recommendation to address consumer experience challenges for heat pumps but defers a comprehensive approach, stating the implementation date is subject to ministerial steers. It highlights existing advice tools and a phoneline service and plans to set out further improvements in a future Warm Homes Plan.
HM Treasury
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14
Accepted in Part
Conflicting advice on 'fabric first' approach creates confusion for households regarding insulation.
Recommendation
While some organisations advocated a ‘fabric first’ approach, which involves improving the thermal performance of materials in a building prior to installing a heat pump, others suggested that it is not necessary, making it difficult for households to determine cost- …
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Government Response Summary
Government agrees with the recommendation and is making specific improvements to its Heat Pump Home Suitability tool, including advice on insulation and energy efficiency measures, to help households determine cost-effective options.
HM Treasury
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16
Accepted in Part
Homeowners lack impartial, personalised advice for decarbonising homes, finding the process confusing.
Recommendation
In response to our question about how DESNZ ensured customers had access to proper information to make decisions about investment and running costs, the Department explained that it provided information through its online tools on heat pump suitability and retrofit …
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Government Response Summary
Government agrees with the recommendation and is making specific improvements to its Heat Pump Home Suitability tool to provide better information, while also stating broader improvements will be set out in the Warm Homes Plan.
HM Treasury
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20
Accepted in Part
Insufficient incentives hinder retraining 110,000 gas heating engineers for heat pump installations.
Recommendation
We heard from DESNZ that a key challenge will be to retrain around 110,000 existing gas heating engineers to install heat pumps. Centrica, an energy company and low carbon heating installer, agreed that it was “vital” to focus on retraining …
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Government Response Summary
Government agrees with the recommendation and highlights existing training grants, updated apprenticeships, and the establishment of a new Office for Clean Energy Jobs, but defers decisions on future training incentives to the Spending Review 2025.
HM Treasury
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25
Deferred
DESNZ yet to determine criteria for homes unsuitable for heat pumps, delaying exemptions.
Recommendation
In response to our question about how it would identify which homes are unsuitable for a heat pump and therefore exempt from the 2035 phase out, DESNZ said that it was some way from determining this, given the deadline was …
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Government Response Summary
The government accepts the implied recommendation to identify homes unsuitable for heat pumps and to provide alternative low-carbon solutions, but defers the action to publish relevant research until Summer 2025. This research will detail properties not suitable for traditional heat pumps and appropriate alternative technologies.
HM Treasury
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28
Accepted
Major hydrogen heating village trials cancelled or delayed, impacting 2026 strategic decision.
Recommendation
In the 2021 Heat and Buildings strategy, DESNZ committed to developing the evidence base necessary to take strategic decisions on the role of hydrogen for heating buildings in 2026. It also committed to establishing large-scale trials of hydrogen for heating, …
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Government Response Summary
Government confirms the recommendation is implemented, acknowledging the cancellation or delay of major hydrogen trials and outlining its ongoing research and development programme to gather evidence for strategic decisions on hydrogen for heating.
HM Treasury
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29
Accepted
Hydrogen town pilot progress halted until after 2026 strategic heating decisions.
Recommendation
We observed that, at the time of our evidence session, an announcement on a successful bidder for a hydrogen town, planned for the end of this decade, was delayed by 13 months. We asked DESNZ when an announcement could now …
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Government Response Summary
Government confirms the recommendation is implemented, stating the decision not to progress a hydrogen town pilot until after 2026 strategic decisions, and outlining its ongoing research and development programme for hydrogen heating.
HM Treasury
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34
Rejected
Uncertainty surrounds future of gas networks and significant decommissioning costs.
Recommendation
Hydrogen UK and the National Audit Office reported that there was also uncertainty over the future role of the gas networks, if it is decided that hydrogen has a limited role and electricity becomes the main energy source.69 This included …
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Government Response Summary
Government explicitly rejects the recommendation for a full assessment on the future of gas networks and decommissioning costs, stating it requires more time, while acknowledging ongoing work to understand scenarios and funding.
HM Treasury
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35
Rejected
DESNZ possesses limited understanding of future gas network decommissioning costs and feasibility.
Recommendation
Although DESNZ clarified that gas networks will be needed for some considerable time, it accepted that it needed to increase its work to look at future decommissioning. The NAO found that DESNZ’s work on the costs and feasibility of gas …
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Government Response Summary
The government explicitly rejects the recommendation for a full assessment of gas network decommissioning costs and feasibility, stating it would require more time. However, it acknowledges the importance and describes ongoing work with regulators and industry to understand decommissioning needs in different scenarios.
HM Treasury
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37
Acknowledged
Intermittent renewable energy sources necessitate new flexible low-carbon technologies for grid reliability.
Recommendation
We noted that renewable energy sources such as solar and wind are determined by the weather, making them intermittent; a view supported by Hydrogen UK. DESNZ recognised that electricity-based heating may change existing patterns in demand for electricity. It said …
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Government Response Summary
Government agrees with the recommendation but defers an implementation date, referencing a Clean Power by 2030 target and the creation of a '2030 Mission Control' to address obstacles, with further details expected later.
HM Treasury
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38
Deferred
DESNZ continues to lack an overarching delivery plan for power sector decarbonisation.
Recommendation
We examined, in a separate inquiry, DESNZ’s ambitions for decarbonising the power sector and concluded that it lacked an overarching delivery plan that would provide confidence to the private sector to invest in new and upgraded infrastructure. We also warned …
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Government Response Summary
The government agrees with the recommendation but defers the implementation date pending new ministerial steers. It has appointed a 2030 Mission Control to accelerate critical clean energy infrastructure delivery, with further information to be announced.
HM Treasury
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Conclusions (23)
2
Conclusion
Accepted
We are concerned that there is too much complexity and potential confusion for households to enable them to make informed decisions about installing a heat pump. Households can face complex decisions when looking to install a heat pump. For example, DESNZ is removing a requirement to have minimum standards for …
Government Response Summary
The government agrees and is improving its Heat Pump Home Suitability tool to include localized links, advice on pipework and radiators, and the impact of insulation on energy bills. It will also set out further improvements to consumer navigation in the Warm Homes Plan.
3
Conclusion
Accepted
DESNZ has made good progress in increasing the number of trained heat pump installers, but it faces a huge challenge to make sure there are enough installers to achieve its target to install 600,000 heat pumps per year by 2028. DESNZ reports that it is on track towards meeting its …
Government Response Summary
The government agrees and is taking actions to increase installers, including the Heat Training Grant (until April 2025), a new Low Carbon Heating Technician apprenticeship (Autumn 2023), and supporting local supply chains with over £600,000 in pilots. It has also established the Office for Clean Energy Jobs.
5
Conclusion
Accepted
DESNZ has not yet worked out how it will support households to decarbonise their homes where heat pumps are not a practical solution. An estimated 20 per cent of homes might be exempt from the government’s plans to phase out new fossil fuel boilers in 2035. This includes those requiring …
Government Response Summary
The government agrees to provide further information on alternative low-carbon heating technologies for properties unsuitable for traditional heat pumps and has commissioned research on feasible approaches, which it intends to publish in Summer 2025.
6
Conclusion
Rejected
DESNZ’s work to test hydrogen for heating has been beset with problems, with key trials cancelled. DESNZ has committed to deciding on the role of hydrogen for heating in 2026. Major trials intended to support its decision have been cancelled or delayed due to local opposition and insufficient supply of …
Government Response Summary
The government explicitly disagrees with the recommendation to set out decommissioning plans by June 2025, stating that a full assessment will require more time due to the complexity and uncertainty of future energy scenarios.
7
Conclusion
Accepted
Low-carbon heating will increase demand for electricity, but the government’s plans to decarbonise power have been delayed substantially. Heat pumps may change existing patterns around the demand for electricity, and DESNZ recognises that it needs to make sure the power system can manage peaks and troughs throughout the day. Low-carbon …
Government Response Summary
The government agrees and has announced a Clean Power by 2030 target, appointing Chris Stark to lead a '2030 Mission Control' to accelerate delivery of critical clean energy infrastructure and resolve obstacles.
1
Conclusion
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (DESNZ) about decarbonising home heating.1
Government Response Summary
The government agrees, stating it is investing up to £42 million in the Heat Pump Ready innovation programme, part of the £1 billion Net Zero Innovation Portfolio, with projects underway and concluding in 2025, to overcome barriers and support innovation in heat pump deployment.
4
Conclusion
Acknowledged
In October 2021, the government published its Heat and Buildings Strategy. The Strategy stated the government’s ambition to end the installation of new fossil fuel boilers by 2035. It also committed to growing the supply chain for heat pumps to a minimum market capacity of 600,000 heat pump installations per …
Government Response Summary
The government agrees with the observation but notes there is currently no single data source for heat pump installations and is investigating various data sources to cover gaps, stating it cannot commit until a suitable mechanism is found.
15
Conclusion
Deferred
We noted that the installation of heat pumps could be a very complicated picture for consumers, and asked how an individual was expected to understand the running costs of a heat pump and the potential impact of installing insulation before or after a heat pump, or for their type of …
Government Response Summary
The government agrees but defers the implementation date pending new ministerial steers. It highlights ongoing activities to simplify switching to low carbon heating for consumers and will detail further improvements in the Warm Homes Plan.
17
Conclusion
Deferred
DESNZ clarified that it was “working on making the Government digital offering in this space much better”. It added that it signposted to digital companies that helped households to calculate running costs and lifetime costs via gov.uk. It recognised, however, that there was a role for it to do more. …
Government Response Summary
The government agrees but defers the implementation date pending new ministerial steers. It outlines ongoing activities to improve consumer support for low carbon heating and states it will further detail improvements in the Warm Homes Plan.
18
Conclusion
Deferred
We received written evidence from the Retrofit Academy, Schneider Electric, Energy UK and MCS Service Company which highlighted that meeting the target to install 600,000 heat pumps per year by 2028 will require a large increase in the number of trained installers. The Heat Pump Association and the Heat Pump …
Government Response Summary
The government agrees with the recommendation to increase the number of trained heat pump installers and describes existing initiatives like the Heat Training Grant and new apprenticeships. However, decisions on future training support beyond April 2025 are deferred to Spending Review 2025.
19
Conclusion
Deferred
DESNZ said that training new installers was a “growing industry”. It stated that it was investing £29 million from 2021–22 to 2024–25 to train installers in the heat sector. Part of this spend includes a £5 million Heat Training Grant to support up to 10,000 heat pump and heat network …
Government Response Summary
The government agrees but defers decisions on future training support beyond April 2025 to Spending Review 2025. It acknowledges the need for more installers, highlights ongoing work like apprenticeship updates and establishing the Office for Clean Energy Jobs, and will work with industry.
21
Conclusion
Accepted in Part
DESNZ does not have a single measure of the number of heat pump installations. Instead, it relies on data from a range of sources, including the number of heat pump 32 Q 21; DHH0008; DHH0010, Written evidence submitted by The Retrofit Academy, 29 April 2024; DHH0027, Written evidence submitted by …
Government Response Summary
The government commits to publishing quarterly data for retrofit installations using government funding. However, for new build and non-government funded installations, it is only investigating mechanisms to collect data and cannot yet commit to doing so.
22
Conclusion
Accepted in Part
DESNZ told us that it was looking to produce a more regular data series that it could publish by combining some of its data sources. It was also developing a dashboard that will show the number of heat pumps installed through each government scheme. The NAO found that regular monitoring …
Government Response Summary
The government agrees to publish quarterly data for retrofit installations funded by the government by Winter 2024. However, it is still investigating methods to collect and publish data for new build and non-government funded installations, unable to commit until a suitable mechanism is found.
23
Conclusion
Accepted
We asked DESNZ how it was learning lessons from the roll out of heat pumps. It explained that it had already learned some lessons, such as about the level of grant driving demand, and that it would continue to evaluate the roll out of the Boiler Upgrade Scheme “very carefully” …
Government Response Summary
The government agrees with the recommendation and commits to writing to the Committee upon publication of the first interim findings from the Boiler Upgrade Scheme evaluation. This report is expected in Spring 2025 and will include details on heat pump take-up across different socio-economic groups.
24
Conclusion
Deferred
In September 2023, the government announced that some homes may be exempt from the planned phase-out of new fossil fuel boilers in 2035. The government estimated that around a fifth of households might be exempt. Examples of such homes could cover those requiring energy efficiency or electrical connection upgrades, those …
Government Response Summary
The government accepts the committee's observations and commits to providing further information on properties unsuitable for traditional heat pumps and appropriate alternative technologies, aligning with the publication of its commissioned research report from Summer 2025.
26
Conclusion
Deferred
The NAO reported that DESNZ was yet to determine its approach for homes that are complex to decarbonise. DESNZ told us that it considered that heat networks would be the next major alternative low-carbon technology for people living in properties that are unsuitable for a heat pump. DESNZ outlined that …
Government Response Summary
The government accepts the implied recommendation to determine an approach for homes complex to decarbonise, committing to publish a research report by Summer 2025. This report will provide further information on properties unsuitable for traditional heat pumps and appropriate alternative technologies.
27
Conclusion
Acknowledged
In a written submission to our inquiry, the Chartered Institute of Housing expressed concern that the social housing sector, which it said accounted for over half of all heat networks, would need clear guidance and support to prepare and respond to the new regulatory regime for heat networks, and that …
Government Response Summary
The government recognizes that the social housing sector will need support and that Ofgem will be responsible for regulating heat networks. DESNZ is working with Ofgem to ensure a proportionate regulatory framework.
30
Conclusion
Accepted
In response to a question about how DESNZ had got so far with the trial at Redcar before realising that the supply of hydrogen needed was not available, DESNZ said that it was not solely reliant on the outcomes from the cancelled village trials, although the trials were “important”. It …
Government Response Summary
The government states the recommendation is already implemented, detailing its ongoing research and development programme for hydrogen heating. This programme includes safety evidence, technical assessments, trial evidence, and energy systems modelling to inform a strategic decision in 2026.
31
Conclusion
Acknowledged
Several written submissions to our inquiry highlighted that uncertainty over the role of hydrogen is delaying key decarbonisation investment decisions until government makes a decision on hydrogen. Hydrogen UK, for example, told us that the decisions about trials and recent announcements had “created ambiguity in the role of hydrogen in …
Government Response Summary
The government acknowledges uncertainty around the role of hydrogen in home heating and is committed to providing clarity, informed by hydrogen village trials, and intends to make strategic decisions in 2026.
32
Conclusion
Acknowledged
Alongside industry, some written submissions highlighted that households were unclear over the role of hydrogen. Octopus Energy told us that there was “widespread 53 Qq 92, 93 54 Department for Energy Security and Net Zero, Correspondence – Hydrogen Heating Town pilot: letter to Gas Distribution Networks – update, 9 May …
Government Response Summary
The government recognizes the need to ensure households have clear information about the role of hydrogen in home heating and will continue to work with industry and consumer groups to raise awareness and provide information.
33
Conclusion
Acknowledged
We asked DESNZ if it was aware of the level of uncertainty for industry given that an increasing number of businesses do not know what the government’s position is on heat decarbonisation. DESNZ told us that it needed to “take decisions in the right order at the right time” and, …
Government Response Summary
The government acknowledges the level of uncertainty for industry and households regarding the role of hydrogen in home heating and believes that a decision on hydrogen should be taken in 2026 to avoid becoming locked into a suboptimal path.
36
Conclusion
Acknowledged
Decarbonising electricity generation is crucial to the government’s net zero strategy, including decarbonising home heating. If, as the government expects, most homes switch their heating systems to heat pumps or heat networks, it is important that these are powered by clean sources of electricity to achieve decarbonisation. In 2021, the …
Government Response Summary
The government acknowledges the committee's observations about decarbonising electricity generation and its 2035 ambition. It reiterates its 2030 Clean Power target and the appointment of Chris Stark to lead a 2030 Mission Control to accelerate delivery, with further details to follow.
39
Conclusion
Acknowledged
DESNZ told us that, since our inquiry into decarbonising the power sector, it had shifted its emphasis towards the importance of spatial planning. It explained that this involved considering both overall energy demand at a local level, such as for electric vehicles as well as heating; and how to connect …
Government Response Summary
The government agrees on the importance of spatial planning for decarbonising home heating and is working with local authorities and other stakeholders to develop spatial energy plans.