In a report, it found that the current heat-pump installation rate “languishes” at just 30,000 per year and hydrogen heating and heat networks are still nascent technologies.
High upfront costs of around £10,000 are needed for the installation of heat pumps which means the government needs to provide “significant financial help” in the short term to reduce carbon emissions from heating in the long term.
According to the report, this is compounded by the artificially high price of electricity relative to gas which is caused by government policy costs and unequal carbon pricing.
“The good news is that innovators believe that with the right support they can bring down the upfront costs, permanently, to £5,000, or perhaps even to parity with boilers in time (roughly £2,500),” the report states.
“This is the government’s stated strategy: to scale up the market and bring costs down. But the Treasury has thus far been unwilling to inject the level of sustained...