This consultation follows the recent Heat and Buildings Strategy, which outlined how the government intends to meet its decarbonisation targets for the broader build environment. In the Strategy, government stated its ambition to reach 600,000 heat pump installations per year by 2028, and for heat pumps to achieve cost parity with conventional gas boilers by 2030.
The market mechanism in the latest consultation sets proposals to make gas boiler manufacturers sell a certain number of heat pumps. An alternative proposal would have energy suppliers doing the same. This will have direct impacts on the UK heat sector and its supply chain; including pressure to develop training programmes, ramp up manufacturing and greater engagement with consumers.
Following consultation with manufacturers, retailers, energy suppliers and trade bodies, the CBI welcomed the principle of a market growth policy for low carbon heat. This, however, should focus on all actors in the supply chain, ensuring there is support for further complementary measures including on:
- Funding: A holistic funding package, circa £9bn, to support the demand for heat pumps and energy efficiency upgrades across all households.
- Skills: Working with businesses to identify the skills gap across the supply chain to create a talent pipeline.
- Consumer engagement and education: to ensure there is adequate demand needed to create a well-functioning heat market
- Coordination with heat decarbonisation policy: from building regulations to smart and flexible systems, and energy efficiency – including the introduction of a delivery body for heat decarbonisation to deliver on a national plan for heat which can be implemented at local level.
The CBI will continue to engage with the BEIS Clean Heat Directorate to provide ongoing input from your business around how a market growth policy will affect business and consumers.
Get in touch with Charlie Garner to discuss how you can shape our response in more detail.
Read the full CBI response here