Source · Select Committees · Business and Trade Committee
Recommendation 9
9
Paragraph: 53
The Future Homes Standard is another key policy in the Energy White Paper.
Conclusion
The Future Homes Standard is another key policy in the Energy White Paper. It aims for new build homes to be fitted with low carbon heating, and high levels of energy efficiency to ensure that homes built to the Future Homes Standard will be zero carbon ready and have 75% to 80% lower carbon emissions than those built to current standards. Considering the Government aims to build one million homes in this Parliament alone, which will be heated by fossil fuel heating systems, it is naïve to assume that these homes will not need to be retrofitted at significant cost. This will be particularly detrimental to families on low incomes and to developments by housing associations.
Paragraph Reference:
53
Government Response
Acknowledged
HM Government
Acknowledged
The Government is committed to phasing out the installation of high-carbon fossil fuel heating in buildings currently off the gas grid during the 2020s. Acting early on these buildings is a no regret option, as they often use the highest carbon fuels and there is no strategic hydrogen option for them. Electrification of heat will be the primary technology of choice for these properties as it is the only pathway to Net Zero proven to work at scale across a broad spectrum of buildings. We envisage other available low carbon heating solutions to be deployed in a small number of off-gas grid buildings where heat cannot be decarbonised through electrification. However, change must happen at a pace that meets our Net Zero obligations and works for industry and consumers, taking into account availability of supply and affordability. Our approach focuses on kickstarting the market through initial targeted financial measures before introducing regulations to continue growing the market. Air source heat pumps - our lead technology for decarbonising heat in off gas grid homes - currently cost off gas grid households £12000 on average to install, which is £8000 more than equivalent fossil fuel systems. Evidence from other countries and our engagement with industry suggests that mass deployment of heat pumps in the UK should lead to significant cost reductions due to economies of scale and reduced overheads. The Heat and Buildings Strategy sets an ambition to work with industry to reduce the upfront costs of heat pumps by 25–50% by 2025 and to parity with boilers by 2030. Many households will find these costs prohibitive and for this reason the Government has been acting to bridge the gap by providing support through a range of funding schemes such as the Domestic Renewable Heat Incentive, the Boiler Upgrade Scheme and the Home Upgrade Grant. These funded measures will play a critical role in supporting early heat pump deployment growth and reducing costs for households. The Government recognises that regulation, as part of a long-term policy framework, will be needed to fully decarbonise off-grid properties while ensuring that the transition to clean heat will be fair and equitable for households, businesses and communities. In October 2021 the Government consulted on new regulations that would phase out the installation of fossil fuel heating systems in homes and non-domestic properties off the gas grid from 2026 (and from 2024 for non-domestic buildings over 1000m2), as part of a full package of measures that will grow the heat pump market to 600000 installations a year by 2028. The Consultation outlined the intention to review the market conditions and affordability ahead of implementing the proposed regulations and to consider whether further action will be needed to enable the transition to clean heat in those properties. this year.