Strategy to make low carbon heat the norm by 2050

The Welsh Government has launched a consultation on their comprehensive Heat Strategy for Wales, which maps out the path to net zero heat across all sectors, saying the degree to which consumers engage and accept new technologies will underpin the speed and scale of the Welsh net zero transition.

Green home model house.jpg

Welsh homes are amongst the oldest and least efficient in Europe, and a significant number of properties are off the gas grid, which means the scale of change required is greater than elsewhere in the UK. There is also a financial challenge with an estimated 45% of Welsh households in fuel poverty.

The Strategy includes an objective to provide a clear regulatory framework to support net zero homes across all tenures, including the private rented sector and states that every homeowner and landlord will be empowered to make the right choices to decarbonise their homes.

20 Jan 2021
Improving the Energy Performance of Privately Rented Homes in England and Wales

Heat pumps are a core solution

Findings from domestic demonstrations across the UK show that there is no property type or architectural era that is unsuitable for a heat pump. However recent research shows that when faced with the full costs, only 25% of homeowners would pursue green home upgrades, even with attractive financial support.

In order to effectively retrofit homes, homeowners and landlords need clarity on how energy efficient their property needs to be, how long they have to make improvements, and how much it will cost.  Propertymark’s August 2023 report ‘Energy efficiency in UK property: Where to go from here?’ recommends that the UK and Devolved Governments should prioritise bringing forward legislation on clear EPC targets to enable people to plan effectively.

Green upgrades not yet adding to property value

Propertymark members agents have made it clear that investing in energy efficiency does not lead to higher house prices, and until this is the case alternative incentives such as vouchers to cover the costs of retrofit evaluations, loans and grants to pay for energy efficiency improvements, allow energy performance improvements to  be offset against rental income or the ability to offset improvement costs against capital gains tax must be provided to support homeowners and landlords to take action.

Running costs not attractive

The upfront technology costs for a heat pump are more expensive than a replacement boiler. Energy tariffs also have a significant impact on the operating cost of a heat pump - at current rates they are 14% more expensive to run than a boiler.

To stimulate the market, the UK boiler upgrade scheme provides grant funding towards low carbon heating solutions, including £5,000 towards an air source heat pump, plus heat pumps are currently VAT exempt. Despite these support mechanisms, the upfront costs of heat pumps are still beyond the means of many people, particularly when coupled with the costs of installing insulation, which is a requirement for the boiler upgrade scheme funding.

The UK Government aims to increase the number of heat pumps installed in the UK each year from 55,000 to 600,000 by 2028. This is expected to reduce the cost of installing a heat pump as efficiencies are made through economies of scale.

Provide your views

Any thoughts and comments can be fed to our Policy Team on [email protected]. We also strongly encourage individuals and businesses to provide their views and expert perspectives.

The consultation closes on 8 November 2023.