Evidence for heat-pump price drop fails to add up

An energy trade body is challenging government claims that heat pump costs will fall by 25-50 per cent by 2025 and reach parity with a gas boiler by 2030.

Air heat pump illustration
Air heat pump illustration - AdobeStock/Studio Harmony

The Energy and Utilities Alliance (EUA) has analysed the French heat pump market where installations average £11,000, a figure similar to installing a heat pump in the UK.

EUA point out that in 2021, 537,000 heat pumps were sold in France compared to 50,000 units in the UK, suggesting that higher volumes do not reduce costs and presents a challenge to current UK policy.

In Britain, the average heat pump costs around £10,000 to install compared to a combi-boiler replacement of £1500. The Heat and Building Strategy, published in October 2021 suggests that increasing volumes of UK heat pump installations will bring costs down.

Mike Foster, EUA chief executive, believes this new evidence renders UK heat decarbonisation plans “useless” and calls for a government re-set.

“The French have blown a hole in UK government policy,” Foster said in a statement. “Their experience shows that higher volumes of heat pump sales does not massively reduce their cost. The forecasted reductions, claimed by BEIS, are simply numbers plucked from thin air. Just across the channel we have real word experience, 537,000 heat pumps fitted last year, at a similar cost to that experienced in the UK, with our 50,000 sales.”

Foster added: “Heat pumps are a globally traded product, why would they be cheaper in the UK than France? It’s complete nonsense to suggest they would. Once you debunk this myth, the whole UK heat and buildings strategy falls apart. It now needs an urgent re-set.

“Boris Johnson set a target of 600,000 heat pumps by 2028; cost reductions of 25-50 percent by 2025; parity with a gas boiler by 2030. In doing so, he has thrown public money at subsidies, he has scrapped VAT on heat pumps, he threatens to fine boiler manufacturers if they fail to meet his targets. But his own advisory body have warned that heat pump running costs are higher than a gas boiler and now these mythical costs reductions are shown to be just that, a myth.

“It’s time for the new PM, whoever that is, to press the re-set button. It’s time to admit the previous policy was just hot air. And it’s time to urgently get our gas networks converted to hydrogen, keeping UK homes affordably warm without damaging the climate.”

According to the government, the Heat and Buildings Strategy sets out plans to cut carbon emissions from 30 million homes and workplaces ‘in a simple, low-cost and green way whilst ensuring this remains affordable and fair for households across the country.’

The plan aims to incentivise consumers by bringing down costs, a plan likened to the transition to electric vehicles.