Recommendation 21

HM Government · verbatim extract Acknowledged

The Government is committed to working with industry to rapidly scale up the heat pump supply chain and to reduce the costs of deploying heat pumps. As announced in the British Energy Security Strategy, the Government will run a Heat Pump Investment Accelerator Competition in 2022 worth up to £30 million. The scheme will help ramp up the domestic manufacture of heat pumps, helping to bring down costs and speed up the transition away from fossil fuels such as oil and gas. In November 2020, we published the findings of the Heat Pump Manufacturing Supply Chain Research Project which aimed to determine whether the supply chain could ramp up to meet demand, and what more could be done to attract inward investment in UK manufacturing. Through market engagement and economic modelling, the project concluded that domestic manufacture of hydronic heat pumps could increase from 11000 today to 635000 by 2030. Since the publication of the report, Government officials have been engaging extensively with heating appliance manufacturers to support development of their business plans and point them towards funding and tax incentives that could help bring investment in heat pump manufacturing and high skilled jobs to the UK. This has already yielded commitments from companies like Vaillant and Ideal, both of which intend to start manufacturing heat pumps in the UK. We expect other heating appliance manufacturers will follow suit over the coming years. of scale, and we expect costs will naturally fall as the market grows. We have recently commissioned further research to determine how we can achieve aggressive cost reduction in heat pumps and will be working closely with industry to agree further actions to achieve this aim.