OFTEC comments on Prime Minister’s Ten Point Plan for a Green Industrial Revolution
Decarbonising heat from UK homes is a national priority that must be urgently addressed. However, we are concerned about the high costs rural households are likely to face under current government proposals to achieve this.
The Prime Minister’s plan announced today for a ‘Green Industrial Revolution’ suggests it’s likely that rural households will soon be prevented from replacing their existing oil boilers and will instead be forced to switch to expensive electric heat pumps – the government’s preferred low carbon solution for rural homes.
Heat pumps are an excellent technology but they are expensive, costing on average £10,900 to install, and need to be fitted in well insulated homes to avoid high running costs and ensure comfort. However, oil heated homes are some of the least energy efficient in the UK, with almost two thirds (65%) in EPC bands E-G, equating to 765,000 properties².
BEIS estimates that bringing EPC Band E homes heated by oil up to an acceptable Band C, would cost on average £12,300. For properties in EPC Bands F or G, the cost would be £18,900³.
This means the total bill to decarbonise all 765,000 properties will be around £19.85 billion – equivalent to an average of almost £26,000 per home – and for some, the figure will be considerably higher.
Given the current economic climate and the fact that disposable incomes in rural areas are already lower and fuel poverty levels deeper, rural households are unlikely to have the capacity to make this level of investment. It is also unlikely that government will be able to support such high costs through grants or other support mechanisms.
Even those that can afford to act may face weeks without heating due to the length of time heat pump installations and the accompanying retrofit work can take to complete.
Recently, 47 OFTEC member companies, including leading household names such as Worcester Bosch, Kingspan and Grant Engineering, wrote to Minister of State for BEIS, highlighting their readiness and commitment to introduce a far cheaper, more practical solution in the form of a renewable liquid fuel to replace heating oil.
This option offers a near ‘drop-in’ solution for existing oil-heated homes, greatly reducing capital costs. It could also deliver rapid progress towards net zero if supported though appropriate policies, potentially saving rural households and government millions of pounds. Yet to date, BEIS has shown no appetite to support this solution.
At this critical time when BEIS is soon to publish its consultation to reduce carbon emissions from heat in buildings, we are urging all rural MPs and other interested members of the House to contact the Minister and press the urgent need to support renewable liquid fuels as a more affordable way forward for rural homes.