Before the election was announced, the Government was seeking further consultation on its plans to reform the electricity market, to future-proof wholesale electricity and decouple gas and electricity prices.
But there hasn’t been as much talk about the impact on gas users.
Here heatly’s technical manager, Paul Spence, suggests that closing this gal could ‘do more harm than good’.
“There is a lot of talk about the ‘spark gap’ – the difference in price between gas and electricity – as being one of the main reasons between consumers shying away from heat pumps, with closing this gap heralded by some in the heat pump sector as the ‘answer’ to all of our problems.
“I would proceed with caution, however; closing this gap could do more harm than good, penalising some of the poorest in society and potentially moving the focus away from high efficiency heat pump installations.
“Given the fact most homeowners have simply followed previous government policies, invested in their home heating using the facilities and services available, is it reasonable to impose punitive costs? Until recently, most of us didn’t have a choice about how we heated our homes.
Transfer of levies would ‘raise the fuel bill for millions’
“Electricity is currently around 4x more expensive than gas because of levies, the idea of the spark gap is that these levies are transferred over to gas. Great news for heat pump owners, but as most UK homes are supplied with gas, a situation that is not set to change anytime soon, the transfer of levies would essentially raise the fuel bills millions of people, most of whom are not in a position to switch to a heat pump, as they don’t quality for ECO4 and simply can’t afford the upgrade costs, even with the Boiler Upgrade Scheme (BUS).
“Let’s be frank about the fact that most early adopters of heat pumps are amongst the better-off in society.
“The other downside of closing the spark gap is that it is likely to impact the acceptable performance of heat pump installations, encouraging lower COPS/SCOPS, because the cost of electricity becomes less of a stumbling block – exactly how many gas boilers have been installed, with minimal attention paid to heat loss, a tendency to turn the flow rate temperature too high, ignoring features such as weather compensation.
“Even with electricity prices as they are, a high efficiency heat pump installation in a well-insulated property, should cost less to run than a gas boiler.
Universal heat pump-only tariff offers a better approach
“Time of Use (ToU) tariffs might seem like a good way to close the spark gap, but this may adversely affect the performance and lifespan of compressors and pipework, due to additional stresses caused by intensive use during certain periods. It is too soon to ascertain whether ToU will have a negative impact, all I would say is that anything that encourages using a heat pump in a way other than designed, should be viewed with caution.
“A better approach would be the introduction of a universal heat pump only tariff, available 24/7, at around 15p/KWh. If the spark gap could be closed to 2.5:1 and installation standards remained a priority, a SCOP 3 – 4 system would deliver heat at around 5p/KWh.
“It is incomprehensible to sacrifice the financial stability of millions of homeowners by artificially raising gas prices to satisfy the lobby groups when there isn’t a coherent policy in place to provide the alternative.”
What do you think? Is there a better solution to making electrified heat more affordable? Write to linda@renewableeenergyinstaller.co.uk with your views.
Image credit: heatly.