This means a 12-fold increase in installations over five years, totaling 3 million new heat pumps and a national drive to electrify home heating.
Currently, the UK is falling short, with only an estimated 250,000 heat pumps installed between 2020 and 2024, while 25.5 million homes still rely on oil or gas boilers.
The report by the innovation charity Nesta highlights that despite progress in decarbonising transport and industry, home heating remains a major challenge, responsible for 14% of the UK’s carbon emissions. The report calls for urgent action to decarbonise home heating to get back on track with net-zero targets.
Key policy U-turn
Nesta estimates that key policy u-turns and delays by the previous Government have left the UK around 15% short of the emissions savings from homes needed to meet future carbon budgets. This major gap comes from changes including scrapping higher energy efficiency standards for landlords and delaying the phase out of boilers in off-gas grid homes from 2026 to 2035.
Designed as an immediate plan for the new Government, Delivering clean heat: a policy plan sets out the most comprehensive roadmap to date to decarbonise the UK’s housing stock.
The detailed plan sets out the priorities the new Government should start working on in its first 100 days:
- Rebalancing energy bills to stop outdated taxes and levies driving up electricity prices relative to gas, so that the lifetime cost of heat pumps is equal to that of gas boilers;
- Creating a new national agency to administer government heat and efficiency schemes and support local authorities with the heat transition;
- Providing certainty by swiftly ruling out hydrogen for home heating and clarifying goals for phasing out new boilers;
- Launching new pilots of neighbourhood delivery schemes which help many homes in an area switch to low-carbon heat at the same time.
Coordinated neighbourhood switching could involve installing shared infrastructure, such as heat networks or heat arrays under streets, or could offer other collective schemes that would enable entire neighbourhoods to switch to low-carbon heating together. This could mean lower upfront costs and a significant uptick in the pace and volume of switches.
Slash bills by £400 per year
Nesta’s analysis reveals that adopting the recommended policy changes could slash energy bills by £400 annually for households switching to heat pumps.
The plan also emphasises the need to overhaul fuel poverty schemes, ensuring better protection for the most vulnerable by accelerating and expanding the Energy Company Obligation (ECO) by late 2026.
Madeleine Gabriel, director of sustainable future at Nesta, said: “The new UK Government will need to reverse the drift away from energy policies that ensured we would meet the UK’s net zero targets. It has inherited a big problem on home heating and will need to take urgent action.
“The good news is that it is possible to change course on the current approach and much can be accomplished rapidly, including setting out proposals to rebalance energy bills to reduce the relatively high cost of electricity. This would stop people paying an unnecessary premium for going green.
We can do it again
“But it will require a major switching of gears to accelerate the transition away from fossil fuels. We know that rapidly transforming home heating is possible – we did it in the 60s and 70s and we can do it again now.”
Marcus Shepheard, co-author, sustainable future policy manager at Nesta and former lead analyst on buildings at the Climate Change Committee, said: “Delivery has to be the top priority for this Government. We need to rapidly scale up the heat transition to get the UK back on track.
“If we get this right the prize is huge and transformative. It means energy security for the country as a whole, and better, warmer homes that are cheaper to run for millions of people. The new Government should grasp the opportunity – there is consensus on what needs to be done but there is no time for delay.”
Charles Wood, deputy director at Energy UK, said: “A coordinated approach under the new Government is essential to accelerate progress towards the goal of decarbonising our homes and businesses. Bold and decisive action is required to give both consumers and industry the confidence to invest. Nesta has rightly highlighted some of the most important elements needed for rapid delivery of low carbon heat in collaboration with the wider sector.”