Government does not know exact number of heat pump installations

The government has been told to reform the way it tracks heat pump installations after it emerged that there is no single measure tracking progress.

The National Audit Office (NAO) warns that failing to accurately track installations could undermine the government’s target of rolling out 600,000 devices per year by 2028.

Subsequently, the NAO has urged the Department for Energy Security and Net Zero (DESNZ) to “establish a single measure for the number of heat pumps installed regardless of policy, and report to Parliament annually, indicating whether deployment is ahead of or behind DESNZ’s expectations and the reasons why”.

The recommendation is made within a damning report on the rollout of heat pumps which also calls for a decision on hydrogen for home heating before the current 2026 deadline and warns that the 600,000 annual target is built on overly optimistic projections. (See below for full breakdown of recommendations).

The report adds: “DESNZ does not have a single measure of the number of heat pumps installed. Instead, it builds its understanding from a range of sources, including DESNZ schemes and MCS installations data.

“DESNZ told us it is looking into how it can combine some of these sources to produce a series that could potentially be published.

“It is also developing a dashboard that will show the number of heat pumps installed through each government scheme.”

On the 600,000 installations target, the independent public spending watchdog warns that “assumptions about levels of consumer demand and manufacturer supply are optimistic”.

The NAO also found that DESNZ has no overarching long-term plan to address the low levels of awareness among households about the steps required to decarbonise home heating.

The government’s latest public attitudes tracker shows that there has been little change in public awareness of heat pumps in the past three years with some 33% of the public saying they have either never heard anything about the devices or have hardly heard anything about them.

The NAO also raises concerns with the government’s flagship Boiler Upgrade Scheme (BUS) which has issued just 18,900 heat pump grant vouchers between May 2022 and December 2023, whereas DESNZ had expected the scheme would deliver 50,000 installations by this point.

The watchdog also said that it was unconvinced that the government’s decision to increase the level of funding under the BUS to £7,500 would have a material impact on uptake of heat pumps.

Despite application numbers soaring since the grant level was increased in October 2023, the NAO said “more data is required to determine whether the change is sustained”.

Gareth Davies, head of the NAO, said: “Government needs to engage every household to achieve its objective to decarbonise home heating as part of the transition to net zero.

“DESNZ’s progress in making households aware and encouraging them to switch to low-carbon alternatives has been slower than expected.

“DESNZ must draw on its experience to date to ensure its mix of incentives, engagement and regulations addresses the barriers to progress in its current programme of work.”

In response, a DESNZ spokesperson said: “By helping rather than forcing families to install heat pumps, with a 50% bigger heat pump grant, we have boosted applications by nearly 40%.

“Almost half of homes in England now have an Energy Performance Certificate of C or above, up from just 14% in 2010. We are investing billions in home upgrades including insulating around 700,000 properties.

“Our Welcome Home to Energy Efficiency campaign is running on tv, radio and newspapers, reaching 16.6 million households with advice and information about how heat pumps, insulation and solar panels can cut their emissions and energy bills.”

NAO recommendations:

On establishing a pathway towards decarbonising home heating, DESNZ should:

• Establish an overarching long-term consumer engagement plan to support achieving key milestones, such as the phase-out of the sale of new fossil fuel boilers by 2035.
• Publish an updated Heat and Buildings Strategy by early 2026 at the latest, that takes account of its revised expectations around the relative roles of electrification and hydrogen for home heating.
• Consider whether it is possible to provide more certainty on the role of hydrogen in home heating before 2026 to help industry plan and invest.
• Continue its work to consider the cost implications of a potentially reduced role for gas networks, including how to ensure sufficient investment in their ongoing operation while still in use, and how the costs of decommissioning will be met.

On the deployment of heat pumps, DESNZ should:

• Accelerate its work to rebalance the costs of energy, for example by moving levies and obligations from electricity to gas bills.
• Establish a single measure for the number of heat pumps installed regardless of policy, and report to Parliament annually, indicating whether deployment is ahead of or behind DESNZ’s expectations and the reasons why.
• Develop a decision framework for its approach after 2028, particularly the balance of taxpayer-funded grants, manufacturer regulations and consumer costs.