Report highlights relative decarbonisation costs

A new report published by the Energy and Utilities Alliance, which represents the interests of gas boiler manufacturers and energy supply companies, has concluded that customers will typically face a five-fold cost increase to install a heat pump, compared to a hydrogen-ready boiler.

The study suggests that households can currently expect to pay up to £15,000 for transition to a heat pump depending on the property type, compared to less than £3,000 for a hydrogen-ready boiler. In addition to the higher cost of the heat pump itself, the disparity is largely due to the additional energy efficiency measures needed to enable a heat pump to operate efficiently, plus the need to fit a hot water cylinder and new radiators. Some homes will also require new internal pipework.

Introducing the report, Mike Foster, CEO of Energy and Utilities Alliance, says: “We need to decarbonise homes if we are to meet our Net Zero ambitions but consumers simply do not have the cash to pay for the high upfront costs of many low carbon heating options. The recent Heat and Building Strategy is right to demand massive reductions in the cost of heat pumps, which according to this report can cost consumers up to seven times that of a simple boiler switch.

“Many heating industry experts are sceptical that the scale of the cost reduction can be achieved, with the claim that heat pump costs will be at parity with gas boilers by April next year, as simply implausible. Regardless of what happens in the heat pump market, it is increasingly clear that they are not a like-for-like replacement of a gas boiler. Consumers will face considerable disruption, cost and the need for behavioural change to retrofit their homes with a heat pump.

“It is recognised that the majority of UK homes are simply not suitable for heat pumps. When an existing boiler needs replacing, installing a hydrogen-ready version, at no extra cost, means that a householder can switch over to clean burning hydrogen when it’s available in the network.”

The report also highlights that the costs of transitioning to cleaner energy can vary vastly in different homes, dependent on the fabric of the building and whether there are any energy efficiency measures in place. The total upfront costs of low carbon heating technologies are analysed with reference to (1) the cost of the heating system, (2) the installation of the equipment and (3) the home upgrades that are needed to support the deployment of the respective technologies in a variety of properties. There is also an assessment of the total costs facing consumers if they were to spread this upfront capital cost across the life of the asset.

Mike Foster concludes: “We urge the government to expedite a decision to mandate hydrogen ready boilers so that when a boiler reaches the end of its natural life it can replaced which one which is future proof.  The UK’s leading boiler manufacturers have made a promise that the hydrogen-ready boilers can be produced at the equivalent cost of today’s natural gas equivalents and with the products already developed they are ready to start manufacturing.”

For more information and to read the report, visit: https://eua.org.uk/resources/residential-heat-the-upfront-cost-of-decarbonising-your-home/

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