Air Source Heat Pumps (ASHPs) are seen as a crucial tool in the fight against climate change; one that the UK has decided to loudly champion. The technology, which can provide hot water and space heating for homes, is far more efficient that the natural gas systems it’s intended to replace. In November 2020, the country announced a target of 600,000 heat pump installations, per year, by 2028. But the way that the UK currently funds its renewable energy projects means that, for many, adopting a heat pump is not financially viable.
The UK has pledged to reach “Net Zero” emissions by 2050 and domestic carbon emissions have fallen by 38 percent since 1990. (This figure is misleadingly high, as the UK has “outsourced” some of its emissions.) As a consequence, the home heating sector is now one of the most carbon-intensive in the country, and in dire need of change.
The mean annual temperature of the UK is just under 10 degrees celsius (50 fahrenheit): It is a relatively cold country, and 85 percent of its homes burn natural gas for heating and hot water. In 2018, the country’s Department for Business, Energy and Industrial Strategy reported that “heat is the largest energy consuming sector in the UK today.” It added that, despite years of work to make homes more efficient, the nation needs a dramatic shift away from natural gas.
An ASHP, broadly speaking, works like an air conditioner running in reverse, extracting heat from the surrounding air eyeaven at temperatures of -15 degrees celsius (5 degrees fahrenheit). This heat is added to a fluid, compressed (where its temperature increases) and then pumped either around your home via radiators or used to heat water for a hot water storage tank.
And these devices, which use electricity rather than gas to run, are significantly more energy efficient than traditional electric heating. “Heating your home is between 60 to-70 percent of your energy bill,” says Matt Clemow, CEO of Igloo Energy. But some heat pumps, including the one that Clemow has in his own home, are significantly more energy-efficient than natural gas.
There are, however, challenges to heat pumps, including the fact that they require a very different operation pattern to traditional gas boilers. Because they output a lower temperature, they need to run continuously. “You generally don’t have that on-off period in the same way,” said Clemow, “it’s more background heat.” This is, broadly, how most air conditioning systems work, something that very few Brits use at home.
In the US, home heating is a little different because there is a wider variety of climates and energy sources than the UK. The US Department of Energy reports that 49 percent of households use natural gas, while electricity is the next most-used source, with 34 percent. That said, three quarters of all homes in the US have air conditioners, which on their own account for around 6 percent of the country’s energy use.
Because of the different climates and energy mixes, it’s not easy to map the European situation onto the American one. The federal government does, however, offer a $300 tax credit for householders who install Energy Star-certified ASHPs, offering more generous discounts for ground source heat pumps like Alphabet’s Dandelion, which draw and circulate heat from underground. Individual states offer their own incentives, dependent on the system you install and the applicant’s income.
In November 2020, the UK published its Green Industrial Strategy, which outlined a “Ten Point Plan for a Green Industrial Revolution.” The plan included work to incorporate hydrogen into the country’s natural gas supply network, improve cycling infrastructure and that target of 600,000 heat pump installations. But Tim Lord, writing at the Tony Blair Institute for Global Change, said “that figure is likely to need to rise to 1.5 million a year by 2035” if the UK wants to hit Net Zero. Either way, it’s a significant jump from the 30,000 per year currently being installed.
But encouraging householders to make the switch from their natural gas-fired boilers is going to be difficult. The initial cost is far higher than the price of just installing a new gas-fired boiler, which will put off many would-be adopters. Then, there is the way the UK structures its energy levies, with a far greater burden on electricity over natural gas. Charges levied onto the sale of electricity in the UK include paying for the cost of the country’s smart meter rollout, bankrolling renewable energy projects and offering cash incentives for people to adopt home energy efficiency technologies.
Think tank Public First recently published an analysis of the European heat market, finding that the UK’s gas prices are almost the cheapest on the continent. France, Italy, Spain and Germany all charge higher prices for gas, and enact higher levies. “Without changes to policy costs on both electricity and gas, there is a far higher chance that the government will not meet its heat pump target,” said the report.
The sales pitch for many clean(er) technologies often focuses on the total cost of ownership being dramatically lower, even if the initial outlay is higher. If you’ve ever spoken to a Tesla owner, you’ll likely have heard about how little each vehicle costs to run. Similarly, when speaking with solar panel installers, the talk is often about how much money you stand to make (or at least save) compared to your existing solution. That conversation, says Clemow, is the wrong way to sell people on the future of heat pumps.
“There’s this conversation about payback,” said Clemow, “you don’t have that conversation about gas boilers — no one goes ‘I’m gonna put in a new gas boiler because it’s gonna pay me back,’ you’re gonna go ‘I want heat,’ therefore you’re gonna put in whatever.” He said that there is, however, a genuine payback case for people on alternative fuels, like oil and Liquefied Petroleum Gas (LPG). But natural gas users are, at least right now, likely to feel short-changed. “That is absolutely driven by the disparity between gas fuel prices and electricity,” said Clemow. He feels that there should be a “rebalancing” between electricity and gas, but that to avoid throwing millions of people into fuel poverty, it would be unwise to “just throw it all on gas.”
Martyn Bridges, Director of Technical Communication and Product Management at Worcester Bosch, is skeptical about how many homes would even be suited to adapt to the technology. “The government’s intention is to convert as many as they can to something else to hit this zero-carbon target,” he said. “But [Heat Pumps] have an achilles heel, which is that they are physically quite different to a boiler.” “[Most] Boilers are wall-hung and quite discreet, [and can be hidden] inside a kitchen cupboard,” he said. Heat Pumps, by comparison, are a large, air conditioner-esque box that sits outside your home, often in the garden. “It will then have to have pipe work coming from that into the house where you tend to have at least a hot water storage cylinder, that needs to be about 200 to 300 liters.”
A number of homes in the UK do not have a hot water tank, and instead rely on a combination boiler which offers heating and hot water on demand. “To locate a space in a home that hasn’t got a hot water cylinder, it can be quite disruptive,” said Bridges. This is particularly problematic in low-rise Victorian terraces with limited floor space, which represent the main housing stock in many major cities. “To steal roughly four meters of that to create an airing cupboard is an issue, since you’re stealing someone’s bedroom or a bit of the landing.” Bridges believes that there are as many as 17 million UK homes where adding (or, in some cases, restoring) hot water cylinders would take an unreasonable amount of space.
Another issue is that most UK radiators are sized to receive water at 70 degrees celsius (158 fahrenheit). “If all of a sudden you put 45-to-50 [celsius] of water temperature into them, then your rooms won’t be hot enough,” he said, because “the radiators won’t be large enough.” So would-be purchasers of heat pumps need to “change some or all of the radiators,” as well as the pipe work connecting them. That could see installation costs double, or more.
Igloo’s Clemow, however, says that often people will choose to change their radiators at the same time as upgrading their home heating systems. He explained that their average customer changes five radiators at the same time as installing a heat pump. “They’re extending, changing, refurbishing or whatever else that might be,” he said, “and actually a lot of the time that normally comes with a water tank replacement or radiators anyway.”
Bridges, however, says that work to adapt the UK’s current natural gas infrastructure to work with hydrogen may be a smarter option, climate-wise. He added that many of the critical components are already in place, with hydrogen-ready boilers needing a small tweak to be compatible. That could be crucial, since the International Energy Agency says that, to reach these goals, the sale of fossil fuel-driven domestic boilers should be ended by 2025.
Tim Lord, who was previously responsible for the UK’s decarbonization strategy, is doubtful that hydrogen will have a significant role to play in this sector. “Hydrogen has an important role to play in delivering net zero,” he said, “particularly in sectors like heavy industry and shipping.” But vast container ships don’t have a wide variety of fuel options, in contrast to the number of ways you can get power to a domestic home. “There are a large number of homes which will be best decarbonized through heat pumps,” one of a series of technologies “which are likely to be cheaper and more scalable.”
Lord said that around 10 million tons of hydrogen would be needed each year to supply the UK’s gas network, which would require “75 gigawatts of offshore wind” to generate cleanly. Even if that massive green project were to be financed, Lord explained that you wouldn’t see the benefits “until the 2030s, since you’re not going to be producing large volumes of [hydrogen] until then.” Lord added that hydrogen simply isn’t as efficient a way to move energy than electricity, and that hydrogen’s boosters — in this sector — are “acting as a brake on the heating transition, rather than helping accelerate it.”
Lord does, however, say that one of the biggest factors holding back the transition is a lack of data. There are, for instance, some far-flung ideas about linking taxation around housing to their environmental performance. But the current, fairly lightweight system of Energy Performance Certificates “can’t bear that weight,” given their inconsistent and ad-hoc nature. And because there’s this knowledge gap, it’s hard for anyone to make concrete conclusions.
And, on the financial side, Lord says that the UK needs to look at ways to tax the carbon use of natural gas, with rebates available for the poorest. But he added that it’s not just the running costs that need examination, but how these retrofit projects are financed in general. He compared the average price of a mortgage, currently under 3 percent, with consumer bank loans, which are often three times more expensive. “If you could fund your heat pump purchase for one and a half percent, rather than nine, that would change the economics quite significantly.”
But, for all of the potential roadblocks, Lord is bullish about the future. “Look at what Norway’s done, it basically did this transition over the last 30 years,” he said, “but I don’t hear of any mass-uprising of people against their heat sources as a result.” He added that “people aren’t attached to gas boilers, they’re attached to having warm homes that they can afford to heat. If you can get that right, then I don’t think people care that much about how you do it.”