The Heat and Buildings Strategy

The Heat and Buildings Strategy includes a number of announcements and policy plans designed to achieve the decarbonisation of virtually all buildings in the UK in the coming decades. Here are some of the key points:

Phase out the installation of new gas boilers from 2035
Homeowners will not be required to remove existing boilers but beyond 2035, boilers will be replaced with a low carbon alternative. For those who switch earlier, the £450 million Boiler Upgrade Scheme will provide households with £5,000 towards an air source heat pump or £6,000 when a ground source heat pump is installed.

Drive the adoption of heat pumps
The Government aims to grow the number of heat pumps installed per year from the current 35,000 to 600,000 by 2028. With cost identified as one of the biggest barriers, the Government aims to work with the industry to reduce costs by at least 25-50% by 2025 and achieve cost parity with gas boilers by 2030. The strategy also aims to ensure heat pumps are no more expensive to run than a gas boiler and support the sector in improving the design of heat pumps to make them easier to install and more appealing to consumers.

Decarbonise off-grid properties
The Government is consulting on ending the installation of high carbon heating systems in properties not connected to the gas grid in England. Non-domestic properties would be first, from 2024, and residential properties from 2026.

Continue developing hydrogen as a potential low carbon fuel
The Government intends to work with the industry to test and evaluate the potential of hydrogen as a replacement for natural gas. This includes neighbourhood, village and town scale tests over the coming years as well as consultations on hydrogen ready boilers. The aim is for the Government to take a decision about the strategic role of hydrogen in 2026.

Invest in heat networks
Through the Green Heat Network Fund and Heat Networks Investment Project, the Government aims to support heat network market growth. This is part of the broader Heat Network Transformation Programme, which will include £338 million investment between 2022 and 2025.

Make buildings greener
The Heat and Buildings strategy contains a number of policy commitments for improving the performance of buildings. These include:

• Improving the performance of existing homes by ensuring as many homes as possible in England reach EPC band C or higher by 2035.
• Boosting funding for both the the Social Housing Decarbonisation Fund and the Home Upgrade Grant - investing a further £800 million and £950 million respectively between 2022 and 2025.
• Aiming to reduce direct emissions from public sector buildings by 75% by the end of Carbon Budget 6 (2037) against a 2017 baseline. This will be supported by the Public Sector Decarbonisation Scheme.
• Reducing energy consumption of commercial and industrial buildings by setting a minimum efficiency standard of EPC band B by 2030 for privately-rented commercial buildings in England and Wales.

Employment and skills
The strategy also projects that decarbonising the heat and buildings sector could support up to 240,000 direct and indirect jobs by 2035. However, the strategy also notes that it is essential to ensure that people with the right skills are available to deliver the changes that will allow decarbonisation. This includes scaling up training to provide the existing workforce with the skills required, as well as attracting the next generation and equipping them for low carbon jobs. The strategy document sets out the skill demand for each area of the low carbon transformation and the size of the gap that needs to be met in the coming years.

With buildings responsible for such a large proportion of the UK’s emissions, boosting the energy efficiency of residential, commercial, industrial and public sector buildings and moving to low carbon heating will be essential. The Heat and Buildings Strategy sets a roadmap for achieving this, but it will require the Government and industry to work together to make the transition a success.