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Proposed Clean Heat Grant is clean but not lean

Parity Projects is one of the delivery partners in BEIS’ £16.5 million Electrification of Heat Demonstration Project.  Working with Ovo, our Programme Builder identifies those homes most suited to heat pumps, based on their existing energy efficiency and, for others, identifies energy efficiency measures that would make them suitable for heat pumps. We are also delivering a BEIS-funded pilot in Greater London, to test ways to build the local retrofit supply chain.

In all our work, we assess fabric alongside heating options to provide assurance on thermal comfort and on affordable bills. In the case of heat pumps the capital and operational costs of heat pumps are tied to the energy efficiency of a property:

  • if heat pumps are put in a leaky home, residents will be cold and have high bills;
  • if heat pumps are oversized due to poor energy efficiency but the home is later improved, they will then run less efficiently; and
  • if the nation’s heating goes electric without reducing demand, the Grid will struggle to power peak heat demand in future winters.

Which is why we’re disappointed the government has not included a measure of thermal performance in its Clean Heat Grant consultation.

The government notes the benefit of energy efficiency measures in the impact assessment:

  • Making energy efficiency improvements ahead of installing a low carbon technology can lead to a warmer home and therefore improve the health of occupants, for example by reducing their risk of cardiovascular and respiratory diseases as a result of warmer internal temperatures. If monetised, this would have a positive impact on the SNPV of the Clean Heat Grant. 

The consultation document notes the government’s manifesto commitment to over £9bn of support for investment in energy efficiency and low carbon heat in buildings over the next decade, through Home Upgrade Grants, a Social Housing Decarbonisation Fund, and a Public Sector Decarbonisation scheme.

But that £9 billion would go further if additional policy levers were used to encourage people to invest in their homes. As a nation we cannot afford to subsidise all measures to decarbonise homes as that would be both too expensive and highly regressive. Instead minimum standards for those in receipt of grants and other incentives appears to be a clear, fair and influential policy. 

We have therefore asked that BEIS review the need for a minimum energy efficiency requirement for those seeking a low carbon heat grant as it would deliver:

  • Healthier homes
  • Lower upfront costs for heat pumps – making any related budget go further
  • Lower running costs – saving consumers money 
  • Less pressure on grid capacity in future winters
  • Positive word of mouth, which will not be achieved through high running costs and/or poor thermal comfort.

Finally, if you are a policy-maker or business that requires modelling of the impact of minimum energy efficiency standards on uptake, our Policy service uses a nationally representative model of homes which to scenario test different policy options taking into account budget, targets (SAP, carbon, bills), measures (heating and fabric) and applying them to all or a subset of properties. Contact us to find out more.