Towards accelerating the sustainable heating transition: Wolseley Group’s view on Government plans

By Simon Oakland, CEO, Wolseley Group

The UK faces a number of important decisions over potential courses of action that can best support the transition to zero carbon home heating. At the same time, there is a pressing need to create clear and feasible routes that will allow householders, manufacturers, installers, and the entire value chain to make that transition.

But there are potential barriers along the way.

There has been much discussion in the media, and by politicians, about the practicalities surrounding the move away from gas boilers to other forms of home heating system, with much of the focus on heat pumps. It’s something that has become a topic of general conversation, in the same way as discussions around the transition to electric vehicles and away from internal combustion engines.

While there are some parallels to be drawn with automotive, heating also has a critical role to play in the UK achieving its ambitions on decarbonisation. It’s a particularly tough nut to crack given our diverse and ageing housing stock, the complexities associated with heating each individual home, and the nuances of the heating sector itself. For perspective, there are upwards of 28 million homes in the UK and heating them accounts for around 14% of the country’s total carbon emissions, and that’s before you even start to consider public buildings and commercial premises.

Government action to encourage the move away from gas boilers has been underway for several years, but there has also been criticism over the effectiveness of the current approach to subsidies.

Inevitably, opinions differ, and there are numerous technological alternatives available that will support the move away from the UK’s high reliance on gas boilers. In recent months, having previously run several negative articles about heat pumps, we’ve seen the Daily Telegraph ask whether hydrogen boilers can replace gas ones effectively, or if heat pumps are the UK ‘s only viable way forward in the transition to cleaner energy. The Telegraph then covered a British Gas announcement about a money-back assurance on heat pumps, saying it will only fit one if it will heat customers’ homes as well as a traditional boiler on the coldest days of the year.

Meanwhile, The Observer summarised that the UK lagged other countries in heat pump sales because of their relatively high purchase cost, and referenced new Ofgem figures that showed a slow response to the Government’s ￡450 million programme offering ￡5,000 grants.

More recently, we’ve had the news that the Government’s Boiler Upgrade Scheme has missed its first year target for the uptake of grants, and a subsequent Government announcement that heat pump installers will be offered ￡500 towards training costs.

And then, of course, the cost of energy has soared in the past year or so.

There now needs to be an expansive and practical approach by Government and close collaboration with industry to avoid policy becoming focused on the wrong areas.

In March, Wolseley Group responded in summary to the Government’s consultation on Improving Boiler Standards and Efficiency, and we made two key points:

• We support the intention to mandate that all new gas boilers are hydrogen-ready by 2026
• The scope of public subsidies should increase to include hybrid boiler packages, meaning that homes can combine both a heat pump and a gas boiler as an interim measure, which we believe will do most to drive uptake of more sustainable home heating

If the above can be applied, with clear and persistent support for these two points, it will enable installers to be more confident about their business plans and skills requirements, and we can expect to accelerate the UK’s sustainable heating transformation. It should also allow manufacturers to scale their outputs, and homeowners to be confident in what they spend on boilers and improving the insulation of their homes.

The inclusion of hybrid heat-pump / boiler units will allow many of the cost and fabric barriers to full heat pump installation to be addressed. This will allow more rapid carbon reduction at lower cost and indeed is the path being taken by several European countries.

Ultimately, no single decision or action, and no single technology, will drive this transformation. There are two forces that need to be in balance throughout - the need to drive down the amount of carbon emitted by home heating to zero, and the need to ensure that the UK’s energy supply networks are resilient and ready to support the needs of households. Like the transition to electric vehicles, people are not going to change boilers for sustainable alternatives unless they are confident they work, they are affordable, and they run without unforeseen cost or disruption.

Our submission to the Government’s consultation process also pointed to the need for consumer awareness and understanding to be increased through effective marketing, both around hybrid boilers and what having a hydrogen-ready boiler in the home will really mean in practice. There is a significant gap in that awareness and understanding currently, which without action threatens to undermine consumer confidence in both newer heating technologies and government policy to support the transition. The UK needs to set a clear course on this and make it easy, and attractive, for householders to follow, with independent advice given how polarised the topic of heating has become.

To date, that course has been a narrow one, and from a public subsidy perspective has been focused on heat pumps. The transition needs to become more expansive quickly, and embrace the full range of technologies that are now available for different types of properties, rather than limiting the UK’s horizons.

We are not alone in this. There are lessons to be learned from two other European countries in particular, both Italy and The Netherlands, which also have particular housing stock challenges. Both have now included hybrid boilers in their scopes for public funding, having seen relatively limited take-up of subsidies for heat pumps.

There is more in Wolseley’s response to the Government consultation than I can do justice to here. But amongst our other recommendations and observations are:

• Training required to install hydrogen-ready and hybrid boilers is relatively minimal, but consumer awareness and education must come first to help build momentum
• There’s a need for close scrutiny of standards and energy efficiency thresholds to ensure that they factor in different types of homes and technology practicalities
• Hybrid systems offer flexibility as well as a cost-effective interim alternative to heat pumps, being suited to different types of property and giving householders time to invest in additional insulation
• There should be a new British Standard for hybrid heat pumps, their controls and boiler installations, and hybrid heat pumps should be recognised in Energy Performance Certificates (EPCs)
• Subsidy programmes should be structured to be both easy to access but also avoid the need for funding of the full installation costs with a later subsidy payment

We also recognise that our whole sector will have to change. Our industry is at a relatively early point on that journey, but just as with technological advances in heating in the past, those changes will come - only this time, at a pace and scale that we’ve never seen before.

Above all, there is an opportunity to accelerate the zero-carbon heating transition by aligning the requirements of all parties involved, and doing so with clarity and certainty. Government may need to lead on funding and policy, but industry should also play a part in sharing its expertise and working to support installers in satisfying growing demand from householders.

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