Buildings are responsible for around 30 per cent of our national emissions and decarbonising homes and buildings not only helps the UK work towards net zero emissions, but also creates an unparalleled opportunity for job creation and innovation.
One of the hardest things to decarbonise is heat and I am convinced heat pumps are central to achieving net zero. I am glad that the Government takes the role heat pumps can have in driving down carbon emissions very seriously, as do I, and has set an ambitious target of 600,000 heat pump installations a year by 2028. A £60 million Heat Pump Ready programme will help to support reaching this target and provide funding for pioneering heat pump technologies.
I welcome the publication of the ambitious Heat and Buildings Strategy which marks a step change in improving energy efficiency and how we heat them. From 2035, all new heating systems installed in UK homes will either use low-carbon technologies, such as electronic heat pumps, or will support other new technologies, such as hydrogen-ready boilers, where the Government is confident fuel can be clean and green.
To encourage consumers to install low-carbon alternatives, a new £450 million three-year Boiler Upgrade Scheme will offer households £5,000 for low-carbon heating systems, such as heat pumps. This scheme is scheduled to open in April 2022.
The strategy also announced that the Government is boosting funding for the Social Housing Decarbonisation Fund, by investing a further £800 million over 2022/23 to 2024/25, and the Home Upgrade Grant, by investing a further £950 million over 2022/23 to 2024/25. This aims to improve the energy performance of low income households’ homes, support low-carbon heat installations, help to reduce fuel poverty and build the green retrofitting sector to benefit all homeowners.
More broadly, the strategy will support 240,000 green skilled jobs by 2035 and deliver £6 billion Gross Value Added by 2030.
In July 2020, £1 billion of funding was committed to a new Public Sector Decarbonisation Scheme (PSDS) to upgrade public sector buildings, including schools and hospitals. I hope to see heat pumps playing a big part in this. Park-based heat pump schemes have the potential to reduce carbon emissions and generate revenue. The Heat and Building Strategy confirmed that the Government aims to reduce direct emissions from public sector buildings by 75 per cent against a 2017 baseline by the end of carbon budget 6. The Government will encourage public sector organisations to monitor and report their energy use, develop and deploy plans to decarbonise, including by applying for government funding, and to lead by example to build demand and encourage other sectors to decarbonise. A further £1425 million will be invested into the PSDS over 2022/23 to 2024/25.
I am pleased that officials have met with representatives of the 'Pump it Up' campaign in which there was a discussion of the market for large heat pump projects.
Many have mentioned the efficiency of heat pumps and I am confident that with the right support they will play a massive role in Britain in decarbonising heat.
I am glad that the Government has been clear that no-one will be forced to remove their existing fossil fuel boiler, but with industry confident that electric heat pumps will be as cheap to buy and run as gas-fired appliances by 2030, homeowners will be able to easily make these choices when the time comes to replace their old boiler.
Finally, kick-starting a heat pump manufacturing base in the UK will cut the cost of each unit, create jobs and generate new export opportunities for British businesses.
As the technology improves and costs fall over the next 15 years, the Government expects heat pumps will become an even more affordable option for consumers as people come to replace their fossil fuel boilers.
Ultimately, the UK’s exposure to volatile global gas prices underscores the importance of the Government's plan to move away from fossil fuels to protect consumers in the long term.