Could Heat Pumps Unlock a New Era of Energy Efficiency?

Heat pumps are often described as a ‘magical’ technology. They offer remarkable efficiency by producing more heat energy per unit of the electrical input used for power than other systems. In some instances, they’re even reaching 500% efficiency. Heat pumps are expected to be the primary heat decarbonisation technology throughout the energy transition, as they can be retrofitted into a wide range of buildings, and are estimated to be technically viable in many properties. Since they are powered by electricity, their carbon footprint will drop to zero in the long term, as the electricity grid becomes zero carbon—a goal that the Government aims to reach by 2030 with help from GB Energy.

What are the biggest barriers to wider heat pump adoption?

Cost

Generally, heat pumps have a high capital costs relative to gas boilers. The average air source heat pumps cost has remained close to £13,000 per install reported under the Government’s Boiler Upgrade Scheme from 2023-2025.  Additionally, under the October-December price cap, electricity remains roughly four times more expensive than gas, heat pump economics are challenging when compared to gas boilers. Consumers who take advantage of the BUS grant for cheaper installations, alongside reduced running costs from solar panels or dynamic tariffs, can achieve significant savings compared to traditional gas boilers.

Consumer awareness and impartial advice  

There are many inaccurate and biased views on heat pumps which can unnecessarily exclude them as a choice for homeowners. Many steer clear of the systems due to assumptions about noise and reliability concerns, or assumptions about the disruption associated with installation. While installation challenges do exist for certain homes, it’s crucial that consumers receive impartial advice on whether a heat pump is suitable for their property, and the benefits it could provide versus a gas boiler.
 

How can the government overcome these barriers?

While a high-level framework has been established, Labour needs to take decisive action to create a policy framework that properly incentivises consumers and industry investment in heat pumps. 

Key actions required are:
•    Maintaining grants and introducing low-cost loans to reduce upfront cost barriers.
•    Rebalancing electricity and gas costs to make heat pumps cost-effective to run.
•    Providing clear information, advice, and guidance to consumers to encourage them to switch to low-carbon systems.
•    Continuing to incentivise low-carbon heating installations.

Labour’s Warm Homes Plan contains big ambitions for heat pumps. The Government views them as a key factor in cutting energy bills and reducing fuel poverty.  However, to maximise the benefits of heat pumps and support the Warm Homes Plan’s objectives, they will need to reform certain policies, while ensuring low carbon heating systems are accessible and widely adopted.

How is the industry innovating to address technical challenges?

The industry has advanced heat pump technology to deliver high temperatures (60-80°C), comparable to the capabilities of gas boilers. In large, rural, energy-inefficient properties, installing fabric measures at a further cost to the consumer are usually required for low-flow temperature heat pumps to be effective. High-temperature heat pumps, however, can provide warmth even on the coldest days and can still provide similar efficiency levels to low-flow systems. They can be a suitable alternative to help meet high heat demands in poorly insulated homes, reducing the need for costly insulation upgrades.

Whilst not a new technology, there is a potential case for supporting air-to-air heat pumps in UK policy. In Norway, for example, air-to-air heat pumps are the most installed heat pump solution. There are some challenges with installing the ductwork needed for an air-to-air heat pump, but they can be significantly cheaper than air-to-water systems, can achieve very high efficiencies, and provide an additional cooling function.

As the UK pushes forward with its energy transition, the role of heat pumps in achieving net-zero emissions cannot be overstated. With the right policy framework, investment, and consumer engagement, heat pumps can become a cornerstone of the nation’s decarbonisation efforts, especially under Labour’s Warm Homes Plan.

If you’re looking for expert advice on heat pumps, energy efficiency, or navigating the evolving policy landscape, Talan is here to help.