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Off-grid homes risk becoming guinea pigs in government decarbonisation policy


5 min read

The long-awaited Heat and Buildings Strategy outlines profound changes coming to the way we heat our homes.

The commitment to fairness that lies at the heart of the strategy is vital and must be followed through if the transition to low carbon heating is to succeed. It is also essential that decisions are based on credible evidence that take full account of the diverse nature of UK housing stock, otherwise many homeowners could face unacceptably high costs and disruption - stalling progress on decarbonisation as a result.

This is particularly true for the UK’s 1.7 million oil heated homes which tend to be older, larger and less well insulated than those properties connected to the gas grid.

Government statements to Parliament have highlighted the scale of this challenge. In 2018, the BEIS Minister reported that 65% (765,000) of oil heated homes in Great Britain had Energy Performance Certificates (EPC) in Bands E, F or G – the three lowest bands. More recently, in September 2020, the Minister stated that, based on BEIS’s own research, the investment required to upgrade a Band E home to an acceptable Band C was on average £12,300, and from Bands F and G, £18,900.

Other data commissioned by BEIS (Technical Feasibility of Electric Heating in Rural Off-Gas Grid Dwellings’ by Delta EE (Dec 2018)) concluded that during a 1-in-20 winter peak scenario, the proportion of rural homes that could be supported by an air-source heat pump is just 41%.

Yet, according to the Heat and Buildings Strategy, ‘BEIS analysis suggests that it would be feasible to install low temperature heat pumps in around 80% of fossil fuel heated off gas grid homes, based on their current energy efficiency’.

This is so strikingly at odds with the previously published information that it must be challenged. Industry bodies OFTEC and UKIFDA have written to the Minister asking for a full explanation of this significant inconsistency. This is essential because it is widely accepted that adequate levels of insulation are necessary to ensure good heat pump performance, with EPC Band C regularly cited as a sensible lower limit. Currently, less than 3% of oil heated homes achieve that rating according to the BEIS statement given to the House.

What really matters is the potential consequences for rural households. According to the proposals, they will be expected to switch away from fossil fuel heating systems from 2026, well before the promised economies from the mass deployment of heat pumps will be achieved (an air source heat pump costs around £11,000 which is in addition to the costs highlighted above). It will also be before heat pump supply chains have matured, the installer base has fully geared up to deliver the transition, and the electricity grid has decarbonised.

It's hard not to conclude that rural households are being used as guinea pigs to develop the heat pump market.

Furthermore, the strategy highlights additional challenges of installing heat pumps off grid, noting that ‘Homes with limited space may struggle to accommodate a low temperature heat pump, whose average size is typically larger than a fossil fuel boiler and may require the installation of internal and external components including a water tank, new radiators and outside unit to draw heat from the air’.

It's hard not to conclude that rural households are being used as guinea pigs to develop the heat pump market. Their homes are widely acknowledged to be the hardest to decarbonise, yet they are expected to be the first to undertake this major change. As a result, they risk paying the highest prices while receiving the worst outcome which is unacceptable.

What can be done?

The Climate Change Committee’s Sixth Carbon Budget (December 2020) identified that up to 900,000 off gas grid homes may need a solution other than a heat pump. At the same time, the most recent National Grid Future Energy Scenario report (2020) also stated that renewable liquid fuels could be needed for over one million rural homes.

Industry bodies OFTEC and UKIFDA have demonstrations across 200 homes which provide working proof that the right type of sustainably produced renewable liquid fuel can offer a simple, more affordable solution for many rural homes. The trials have proven that the average cost to convert an existing oil-heated home to the fossil free liquid fuel Hydrotreated Vegetable Oil (HVO) is around £500 and this solution offers an immediate 88% reduction in carbon emissions. A recent survey of almost 1,500 oil heated homeowners also found that an overwhelming 98% said they would be interested in this option.

OFTEC and UKIFDA are confident that, with the right policy levers in place, our industry can deliver this solution at scale during the 2020s. Once the inconsistencies in BEIS’s data are revealed, and rural households understand the challenges they face, it will be readily apparent that solutions such as renewable liquid fuels are both vital and necessary.

We are therefore urging the government to extend the incentives for renewable liquid fuels, beyond aviation and road transport, to include off-grid home heating to ensure rural homes are not left behind in the UK’s home heating decarbonisation policies.

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