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By Ørsted

Off-grid housing stock is misunderstood and it’s putting decarbonisation at risk

Credit: Adobe


5 min read Partner content

Business as usual cannot be an option - the Renewable Liquid Heating Fuel Bill is a chance to make real progress on decarbonising the country's off-grid homes.

‘Our homes are our castles’ stated the British Energy Security Strategy, highlighting the strong desire people have to remain in control over changes to their home. For off-grid properties the parallels go further because, like castles, they often tend to be older with unique architecture which makes them difficult and expensive to keep warm. As a result, rural parts of the UK aren’t as wealthy as they are often perceived to be, but face higher levels of fuel poverty. This misunderstanding has a big impact on decarbonisation.

Everyone is going to have to play their part to reduce emissions in support of net zero and this includes oil heated homes – there’s no suggestion we should make an exception and continue to use fossil fuels indefinitely. The government’s proposed approach for off-grid, set out in its Heat and Buildings Strategy, is to end the installation of fossil fuel heating systems from 2026 in domestic properties and 2024 for large commercial premises. In most cases, homes and businesses on oil heating will be expected to transition to a heat pump.

Heat pumps are an important technology and have a central role to play in our low carbon strategy. OFTEC already runs several heat pump training courses to help bolster the technician base needed to deliver heat pumps at scale. However, heat pumps aren’t a silver bullet, particularly off-grid where the social and economic landscape is often misunderstood. The government believes the vast majority of fossil fuel heated rural homes are suitable for a heat pump but this definition is somewhat vague. In most properties you may technically be able to install one but this does not mean it is financially viable for the consumer.

The latest Fuel Poverty report published by the ONS reveals that 19.4% of off the gas grid households are fuel poor. This compares to 12.3% on the gas grid. The fuel poverty gap (the reduction in fuel costs needed for a household to no longer be fuel poor) is also £477 off the gas grid, three times higher than the £160 for households on the grid.

Furthermore, when you overlap a map of UK properties off the gas grid with a map of median gross earnings there’s a clear correlation. The parts of the South West, East of England, Wales, the North East and Scotland which have below average median incomes are typically also not connected to the gas grid.

So why does all this matter? For some properties, the adoption of heat pumps could be relatively straight forward and we fully support the technology where suitable. However, many rural homes on oil heating are typically older with low energy efficiency and may require extensive renovations, such as added insultation, new radiators and a hot water tank, for the technology to work effectively. According to the government’s online calculator, for some properties total costs could exceed £25,000. As we’ve established, many of these homes and businesses are those least able to afford these high costs.

This is compounded by the proposed 2024/2026 deadlines for oil homes to transition compared to mains gas in 2035. Being first in line means they won’t benefit from the resulting growth of the heat pump market and reduction in costs. Not to mention more competition to drive down prices as the installer base matures. As a result, oil heated homes face a perfect storm of higher costs and lower incomes in the midst of a cost of living crisis.

That’s why, when delivering low carbon heating, we can’t just focus on the technology. The social landscape has an equally important role to play because homes and businesses need to be able to afford the transition. Otherwise, we will see parts of the UK pushed further into poverty or high levels of resistance which could stall the drive to net zero.

So, what’s the solution? We must pursue a technology neutral approach to give consumers a choice of low carbon heating solutions so they can choose the most appropriate option for their home based on practicality and affordability. This means, alongside heat pumps, renewable liquid fuels such as Hydrotreated Vegetable Oil (HVO) must be supported. Nearly 150 properties have already switched to HVO as part of a demonstration project, reducing emissions by 88% with a conversion cost expected to be around £500.

Our industry is ready to deliver this at scale and a survey of oil users found support levels for a renewable liquid fuel solution at over 95%. Rural MPs are getting on board with strong support for the recent Renewable Liquid Heating Fuel Ten Minute Rule Bill, demonstrating the strength of feeling across Parliament that rural households off the gas grid need to be listened to and given a fair deal. It’s now time for the government to play its part and adopt the Bill in its decarbonisation strategy to deliver a fair, low carbon future for off-grid homes.

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