Homeowners switching to heat pumps under Labour’s net zero drive face higher energy bills, a government report has found. [some emphasis, links added]
Ed Miliband, the Energy Secretary, extended the Boiler Upgrade Scheme (BUS), which offers £7,500 (~US$10K) subsidies to homeowners installing a heat pump, for £2.4bn (US$3.2B) earlier this year.
Mr Miliband justified the extra funding by claiming that installing technologies like solar, batteries, insulation and heat pumps “can save families hundreds of pounds a year on their bills”.
But The Telegraph can reveal that his department’s impact assessment of the plan showed that homeowners who installed heat pumps would face additional energy costs from running the units.
Modelling by the Department for Energy Security and Net Zero (DESNZ) published last month found that extending heat pump grants until April 2030 would provide around £4.1bn (US$5.4B) worth of benefits to Britain as a result of lower carbon emissions and improved air quality.
But it also found that these benefits would come with £2.3bn (US$3.1B) worth of costs. This included the additional upfront cost of installing heat pumps in homes rather than replacement gas boilers, totalling £1.6bn (US$2.12B).
The impact assessment also identified a further £95m (US$126M) hit to homeowners who take up Labour’s heat pump grants, due to higher “long-run variable costs of energy supply (LRVC)”.
These costs will be higher because households with a heat pump use more electricity – which is more expensive per unit of energy than gas – to heat their homes, The Telegraph understands.
Experts told The Telegraph that this £95m (US$126M) figure represented the additional cost to energy bills resulting from Labour’s decision to extend heat pump subsidies until 2030.
The Government’s own report said: “Changes in household energy costs after installing BUS-supported low-carbon heating systems are captured in the LRVC.”
Around 390,000 new heat pumps are expected to be installed under the Boiler Upgrade Scheme. These households would bear the brunt of the costs associated with Labour’s heat pump grants, according to the analysis.
Read rest at The Telegraph
