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The Energy and Utilities Alliance (EUA) has called for a re-set of government decarbonisation plans because there is little prospect of a significant fall in heat pump costs. The trade association, which represents the interests of gas suppliers and manufacturers, points to the experience of French consumers who are currently asked to invest an average of £11,000 for a heat pump installation despite demand currently being more than 10 times greater than that in the UK.
The average heat pump costs around £10,000 in the UK to install compared to a combi-boiler replacement of £1500, but current government policy believes heat pump costs will fall by 25-50 per cent by 2025 and reach parity with a gas boiler by 2030.
The Heat and Building Strategy, published in October 2021, suggests that increasing volumes of UK heat pump installations will bring costs down, but the EUA suggests this argument is fatally flawed. Last year 537,000 heat pumps were sold in France, compared to 50,000 units in the UK, suggesting that higher volumes do not reduce costs.
“Heat pumps are a globally traded product, so why would they be cheaper in the UK than France?” asks EUA chief executive Mike Foster. “It’s complete nonsense to suggest they would. Once you debunk this myth, the whole UK heat and buildings strategy falls apart. It now needs an urgent re-set.
“Boris Johnson set a target of 600,000 heat pumps by 2028; cost reductions of 25-50 percent by 2025; parity with a gas boiler by 2030. In doing so, he has thrown public money at subsidies, he has scrapped VAT on heat pumps, he threatens to fine boiler manufacturers if they fail to meet his targets. But his own advisory body have warned that heat pump running costs are higher than a gas boiler and now these mythical costs reductions are shown to be just that, a myth.
“It’s time to admit the previous policy was just hot air. And it’s time to urgently get our gas networks converted to hydrogen, keeping UK homes affordably warm without damaging the climate.”