A group of energy suppliers, representing an estimated 20 million customers across the UK, have today called for urgent action and new policies to accelerate take-up of low carbon heating.
In their ‘Options for Energy Bill Reform’ report, the coalition suggests the energy market in its current state is unfair as it tends to penalise customers who want to invest in cleaner heating.
The research predicts UK households that opt for an air source heat pump will be paying £305 more a year in 2030 in energy bills than those with a gas boiler unless the current policy changes.
The analysis suggests the UK install more than 1.6 million new gas boilers every year and just 30,000 heat pumps.
The authors of the report highlight the example of France where there are ten times as many heat pump sales per capita as the UK.
They note France has lower renewable policy costs on electricity than the UK and also levies an additional carbon charge on fossil fuels.
The group forecasts the UK will miss its 2035 ambitions without changes to rebalance energy bills between electricity and gas.
Philippe Commaret, Managing Director of Customers at EDF, said: “In order to successfully reduce our household heating emissions and reach our net zero targets, we must make it more affordable for customers who want to invest in low carbon heating options.”
Michael Lewis, Chief Executive of E.ON UK, said: “Britain has a once-in-a-generation opportunity to make a positive change, reduce emissions and kickstart a new industry, but unless we get the economics right, we’ll never get the delivery right.
“To meet the Prime Minister’s 600,000-a-year heat pump target in just seven years means we need to start making energy bills fairer for everyone now.”
Adrian Letts, Chief Executive Officer of Retail of OVO Energy, said: “Today, everything begins with net zero. It’s both an opportunity and a fundamental challenge for the energy sector.
“This report shows that the amount of additional policy costs loaded onto electricity bills, makes alternatives to cheap gas boilers such as a heat pump far more expensive.”
A BEIS spokesperson said: “We remain firmly committed to decarbonising the UK’s homes.
“We have awarded over £560 million to local authorities to support green retrofitting and will be providing an additional £300 million of new funding for energy efficiency improvements for low-income and social housing.
“This amounts to £1.3 billion in spending on energy efficiency measures in the upcoming financial year.
“The Green Homes Grant scheme has also started installing green upgrades to the homes of over 50,000 low-income households, helping people save money and improve the energy efficiency of homes with upgrades including heat pumps and insulation.”