Attempts to insulate the UK’s draughty homes have failed time and again, with botched schemes over the past two decades leading to a massive drop in the number of insulation upgrades. With its long-awaited warm homes plan, the Labour government has a different strategy: to bypass insulation in favour of installing green technology such as solar panels and heat pumps.
About £5bn will be invested in home upgrades, including solar panels and batteries, in the form of grants to people on low incomes, as well as £2bn in consumer loans for people who can afford them, and £2.7bn in “innovative finance”, which could include schemes such as green mortgages, whereby householders get a lower interest rate if they invest in making their home more energy efficient.
There will still be a place for insulation but it will no longer be the prime objective of the £17.5bn to be spent over this parliament, made up of £15bn in public funding through the warm homes plan and about £2.5bn spent through the energy company obligation (ECO) scheme to date.
For years, installations of heat pumps were held back, because the government insisted that subsidies to switch to the low-carbon technology would only go to homes that were already insulated to the maximum possible extent. As well as adding a potential £10,000 to the cost, insulation upgrades were time-consuming and disruptive, which put many people off.
Scrapping the ECO scheme, which was paid for through additions to energy bills in Great Britain, has given ministers freer rein over what can be funded, as well as providing an instant hit to lower bills. Opting to “lean in” to what households want – green technology rather than insulation – could be the spur that is needed to make home upgrades more attractive.
The warm homes plan is being presented as consumer choice, all carrot and no stick – the thinking is that when people see that switching to low-carbon technology will save them money, they will rush to join in. The longstanding proposal, which originated under the previous government, of a ban on gas boilers beyond 2035 has been quietly dropped.
Labour was undoubtedly wary of providing a target for Reform UK and the Conservatives, to whom headlines about ripping out boilers have been a gift. But appeasing the right comes at a cost. The UK is stuffed with “boiler slingers”: plumbers whose main, highly lucrative business is installing gas boilers, often oversized and inefficient. These small firms have shown little inclination to change, and now are being told they will never have to.
That they should suddenly see the point of heat pumps, which require much more care and more time over installation – usually several days, compared with a single day or less for the replacement of an existing gas boiler – may prove too much to hope for. Some money is to be made available for retraining, and £90m will go to encourage manufacturers to build up their heat pump-making businesses here. But the UK has an estimated 120,000 domestic gas engineers and plumbers wedded to the status quo.
Jess Ralston, the head of energy at the Energy and Climate Intelligence Unit thinktank, said: “Over the years it will become increasingly obvious that the North Sea is running out of gas, and that we need to move away from gas boilers if we want energy independence. The government may prefer carrots now but at some point, a stick might be a more effective tool to ensure we’re not ever more reliant on foreign gas supplies.”
Garry Felgate, the chief executive of the MCS Foundation, which campaigns for a carbon-free future, called for a reinstatement of the proposed ban. “The government must now commit to a 2035 phaseout date for fossil fuel boilers, meaning no new gas or oil boilers can be installed after that date. Without such a policy, boilers will continue to burn fossil fuels long after 2050, undermining our legally binding climate targets,” he said, pointing to polling suggesting that a 2035 phaseout date would be popular. He added that this date would “provide certainty to industry and enable households to make informed decisions about their heating”.
