The UK Government published its eagerly-awaited Heat and Buildings Strategy on 19th October 2021. We spoke to our energy specialist Laura Williams who carried out major research into the UK heat pump supply chain and workforce needed for the manufacture and installation of these systems about what this means for the energy and construction sector.

“The publication of this new strategy is really positive for the UK’s transition to net zero by 2050 and sets a firm direction of travel for the heat pump and construction sector. Emissions from heating buildings account for as much as 21% of total national emissions so this is a key piece in the net zero puzzle. We’re pleased to see the government has set out a clear route, which our research demonstrates has multiple benefits, and we now have a comprehensive, evidence-based direction of travel so planning and investments can be made accordingly.

Step 1: Improve Energy Efficiency of Building Envelope

“The new strategy sets out many targets and dates with a headline of phasing out boilers by 2035 – a date that feels a long way away given the urgency of the task at hand. But earlier targets focus on improving the fabric of buildings to meet better energy efficiency standards. Immediate first steps include targets to make all new builds achieve EPC E by 2020, EPC C for rented homes by 2025, and EPC band C by 2035 for existing buildings where cost-effective, practical, and affordable. In an ideal world building fabric improvement and the installation of low-carbon heating alternatives would happen in tandem to minimise disruption to homes, but this one-off transformation requires significant up-front investment. Instead, the strategy sets a path for making most homes more energy efficient before installing a heat pump to spread the capital costs across a longer period.

Step 2: Time to Recruit and Upskill

“One of the benefits of this approach is it offers time to recruit and train the vast and skilled workforce needed to deliver the retrofit revolution. We found in the Building Skills for Net Zero report we delivered for CITB (Construction Industry Training Board) that if the CCC (Climate Change Commission) scenario was followed we would need around to 94,000 new skilled workers each year to carry out the major refit work needed for every building in the next 29 years.”

Step 3: Installation of Low Carbon Heat Source

“The next targets in the strategy focus on installing low carbon heating systems – mainly heat pumps and low-carbon heat networks. Initial grants are outlined as £5,000 for an air source heat pump, and £6,000 for a ground source heat pump, but a consultation on the design of a market-based instrument to drive down relevant costs has also been launched. Phasing out boilers once the cost of low-carbon alternatives has fallen makes sense strategically given we estimated the total cost of net-zero retrofit of the built environment is currently in the region of £1 trillion, or about £35 billion a year. The market-based instrument will be essential to meet the target to make low-carbon alternatives no more expensive to buy or run than a gas boiler by 2030 – a 25-50% reduction in costs in under 5 years.

“In our recent research with BEIS we found there is a significant opportunity for UK economy from domestic heat pump manufacturing in terms of job and value creation, and our latest project will seek to understand how these costs could be lowered over time. The mass roll-out of heat pumps on the scale required is possible – the market-based mechanism will be central to driving that roll-out and lowering costs for the consumer, and stakeholders should engage with BEIS’ consultation to ensure it meets the needs of the challenge ahead.”