The Road To Net Zero
Heat Pump Investment Roadmap...
The UK is leading the charge towards a net zero future...
The UK Government is committed to ambitious action to decarbonise the way homes and businesses are heated. Heat pumps have a key role to play in decarbonising heating across the UK - irrespective of the role of hydrogen or other heating technologies - that is why the government we are aiming to increase the number of heat pump installations from 55,000 a year in 2021 to 600,000 a year by 2028.
By the end of the decade, the UK will be one of the largest markets in Europe for heat pumps.
To attract investment, the UK Government is delivering a package of policies, including targeted regulation, a new market-based mechanism, and public investment through programmes such as the Boiler Upgrade Scheme.
Heating appliance manufacturers from across the globe are investing in the UK, owing to the supportive policy environment, tax incentives and availability of skilled labour.
To further help heat pump manufacturers expand their businesses in the UK, and to encourage the transition from fossil fuel boiler manufacturing to heat pump manufacturing, the government are also aiming to create new investment opportunities through programmes like the Heat Pump Investment Accelerator Competition.
The UK has one of the world's most attractive business and investment environments..
- Open, liberal economy.
- Table regulatory regime with independent legal system .
- Globally competitive and transparent tax regime.
- Generous R&D and patent tax relief.
- The UK-EU Trade and Cooperation Agreement allows zero tariff market access with the EU.
- Flexible labour market.
- World class professional services sector supporting businesses with insurance and finance.
- Already significant exporter of heat pumps and component parts.
Heat pumps are vital to Net Zero...
Heat pumps are a widely suitable and cost-effective solution for decarbonising the UK's buildings and are vital to delivering Net Zero.
Heating is responsible for over a third of UK carbon emissions. Reducing our carbon emissions to Net Zero by 2050 means we must decarbonise the heating of over 30 million homes and businesses across the UK in a little over 25 years.
In addition, around half of our natural gas demand is from heating, so decarbonising our heating is also an energy security priority.
Regardless of the role of other technologies, the government expect at least four million heat pumps to be installed by the end of the decade.
A heat pump can reduce carbon emissions by up to 70 per cent compared with a gas boiler, and as we decarbonise the supply of electricity this will only increase.
Evidence shows that the majority of UK homes and businesses are suitable for a heat pump. This includes analysis which estimates that 90 per cent of British homes have sufficient insulation and electrical capacity for a heat pump.
Heat pumps are cost effective when compared to other low carbon heating technologies; investment by industry in more efficient heat pumps, means they are now typically more than three times as efficient as a gas boiler.
Hundreds of thousands of heat pumps have already been installed in the UK. They are proven to work, even in the variable British climate; delivering warmth to satisfied customers up and down the country, even at sub-zero temperatures.
Why invest in the UK heat pump market?
A sector with ambitious targets and major opportunities for growth...
Long term vision with an aim to grow the market to 600,000 heat pump installations each year by 2028 and up to 1.9 million a year by 2035, underpinned by ambitious policies.
Regulations to phase out fossil fuel heating in homes and businesses over next decade, starting with new buildings in 2025; with many housing developers already switching to heat pumps.
A Clean Heat Market Mechanism to be introduced in 2024, giving investors confidence in sustained growth of the UK heat pump market.
Over £12 billion in public investment through grant programmes to incentivise the public and businesses to decarbonise buildings, including the Boiler Upgrade Scheme, Public Sector Decarbonisation Scheme and Social Housing Decarbonisation Fund.
Enabling environment with government support to unlock investment in renewable electricity generation, electricity grid infrastructure, and green financing solutions.
Innovation funding available to develop heat pump solutions for the UK housing stock, that are simple to install, efficient and affordable.
Grants, financing and expert support available to businesses to help them grow and invest in the UK heat pump supply chain, which is already home to some of the world's biggest heating equipment manufacturers, as well as cutting edge innovators bringing the latest technology to market.
Strong, proven and growing export opportunity with £100 million of heat pumps and components already exported by UK companies.
Information taken from Department for Energy Security and Net Zero and Department for Business and Trade Document Published 03 April 2023
