Green Tories urge new PM to accelerate heat pump roll out

Green Tories have proposed an eight-fold increase in the number of government bankrolled heat pump installations as part of three-pronged plan for the next prime minister to combat next winter’s gas crisis.

The Conservative Environment Network (CEN) on Tuesday (16 August) published a three-point plan ahead of next week’s energy price cap announcement by Ofgem, which is likely to see bills exceed £3,000 in October.

The first element of the plan for the new PM is to increase the installations of heat pumps through the government’s recently announced Boiler Upgrade Scheme from the current 2025 target of 90,000 to 775,000 by the same date.

This expansion of the upgrade scheme would require an additional £650 million over the scheme’s three-year life span.

Based on industry analysis, the CEN said the upfront costs of heat pumps will fall as the supply chain for delivering devices matures.

Leadership contender Rishi Sunak has said during his campaign that he would scrap the Boiler Upgrade Scheme to free up cash for helping customers with their energy bills.

The CEN also called for an additional £1 billion a year of government investment to expand the Energy Company Obligation (ECO) to insulate a further 500,000 fuel-poor homes this winter and at least one million a year from April 2023. During 2020, 324,200 measures were installed through the supplier-funded programme.

Alongside this emergency extension of ECO, the CEN has also urged ministers to make a longer-term funding commitment to energy efficiency in order to boost investment in the supply chain.

The third prong of the plan is a government requirement on energy firms to contact their customers and offer advice on how to turn down their boilers to conserve gas and lower bills.

The CEN says many boilers are run at unnecessarily high temperatures, reducing their efficiency and wasting gas. Requiring energy firms to advise on adjusting household boiler settings to a flow temperature between 55 and 60 degrees can cut bills by up to eight per cent without sacrificing warmth, according to the CEN.

With energy bills set to remain high until at least 2024, the CEN argued its three-point plan will reduce the sums that the Treasury has to spend on future financial support packages.

In total, the group said the proposed measures could cost up to £9 billion over the next eight years, which the CEN added is “significantly less” than the £37 billion announced by the government so far to help households through the energy crisis.

The network said the proposed measures should be on top of existing and new direct financial support to vulnerable households.

Rather than designing “complex” new schemes, CEN director Sam Hall said the new PM should put more money into existing programmes that are already working.

Philip Dunne, chair of the Environmental Audit Committee and a member of the CEN, said: “If we act decisively now, we can insulate hundreds of thousands of fuel-poor homes to lower energy bills permanently. Financial support is only a one year fix for this winter. Without a new national programme starting to fix the UK’s 19 million energy-inefficient homes, families would be left exposed for longer and the taxpayer landed with a larger bill.

“I urge the next prime minister to consider these practical, industry-led proposals to combat the gas crisis this winter. By insulating our homes and installing heat pumps, we can reduce our reliance on gas, tackle fuel poverty and loosen Putin’s grip on our country’s economy.”

The CEN’s three-point plan has been published as ‘The Times’ has reported that Tory leadership contest front runner Liz Truss will target help with energy bills at poorer households if she wins rather than extending the across the board £400 discount for all households, which was introduced by Sunak when he was chancellor of the exchequer.