AIR SOURCE & GROUND SOURCE HEAT PUMPS
Overcoming challenges in the heat pump sector for 2025
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Charlotte Lee, Heat Pump Association (HPA), chief executive looks ahead to 2025, addressing challenges for the sector and how the sector plans to tackle them
n 2024 the UK heat pump sector saw record growth, with a 63% increase in hydronic heat pump sales and a 15% rise in training qualifications. The HPA’s factory gate sales data shows just under 100,000 hydronic heat pumps
were sold and over 9,000 individuals completed a recognised heat pump training qualification. Despite this progress, substantial effort is needed to accelerate deployment and grow the workforce to meet carbon reduction targets, enhance energy security and lower consumer bills. The previous Government’s target of 600,000 heat pump installations per year by 2028 and the Climate Change Committee’s recommendation of heat pumps in 10% of households by 2030 remain challenging.
Looking ahead, the sector is growing and whilst
there are many existing challenges it is also full of opportunities for growth and innovation.
Cost
Whilst the upfront cost of a heat pump system has been supported by grants such as the Boiler Upgrade Scheme (BUS) and Home Energy Scotland Grant and Loan. The running costs of heat pumps remain a challenge.
Launched in April 2022, the BUS offers a £7,500 grant for air-to-water and ground source heat pumps to homeowners and small businesses in England and Wales. It has supported over 38,000 heat pump installations so far. October 2024 saw the Government announce an additional £30m and January saw an additional £25m allocated to the BUS for this financial year. It is fantastic to see the Government are proactively taking action to support growth and enhance confidence in the sector.
Whilst no clarity for the continuation of BUS has been provided beyond March 2026, the HPA are hopeful the Government will continue to support this scheme and other schemes such as the Energy Company Obligation and Warm Homes: Social Housing Fund through confirmation of allocated funding in the upcoming June Spending Review.
One of the biggest challenges for accelerating heat pump deployment in the UK is the high electricity-to-gas price ratio, currently 3.97, one of the highest in Europe. A significant contributor
to high electricity prices are the disproportionate application of Environmental and Social Obligations often referred to as ‘green levies’ which make up 16% of electricity bills and just 5% of gas bills.
This means that although heat pumps are 3-4 sometimes 5 times more efficient than fossil fuel heating systems, they may not result in bill savings. To overcome this, we have seen a number of energy suppliers offering heat pump tariffs, which offer a reduced cost of electricity used by a heat pump. The HPA have been calling on the Government for many years to address this disparity which distorts the heating sector, and we are eagerly awaiting a consultation on how best to redress this distortion with the aim of making electricity cheaper.
Clarity of policy
Since the Labour Government came into office in July there have been a number of welcome announcements such as the increase of the Boiler Upgrade Scheme budget, the intent to remove some limiting planning rules for heat pumps, the path to clean power by 2030 and the announcement of the future publication of the Warm Homes Plan expected in Spring 2025. However, clarity of policy and a clear pipeline
for heat pump deployment and decarbonised heating needs to be stronger. Specifically of interest is the Government’s consultation response on the Future Homes and Building Standards (FHBS), which if introduced, will tighten the regulations so that the majority of new build homes will be heated by a heat pump or a low carbon heat network. With the UK set to become one of the largest markets in Europe for heat pumps, the heat pump transition presents opportunities for investment in UK manufacturing and installation roles. To achieve this accelerated growth and encourage further investment in UK manufacturing and the workforce, a clear, credible heat decarbonisation transition plan is needed. The swift publication of the Future Homes and Buildings Standards are an essential part of this, providing a baseline for demand, to support long-term success and decarbonisation.
Workforce
Last year saw over 9000 individuals successfully completing a recognised heat pump training qualification a 15% increase compared to 2023. Additionally, HPA members have over 260 training sites UK wide, which have the combined capacity to deliver over 30,000 recognised heat pump training places and 50,000 manufacturer specific training places. However, recent HPA modelling in our report ‘Unlocking the domestic heat pump workforce’, reveals that despite positive growth in recent heat pump installer training rates, there is a gap between the number of trained individuals and active heat pump installers working in the market with around 39% of those who complete a training course currently not going on to install heat pumps straight away.
The availability and provision of courses are not the limiting factor, rather a lack of confidence in the market and uncertainty about the deployment pipeline is hindering interest. The HPA are working closely with the Government to monitor the success of incentives to encourage training such as the Heat Training Grant, and the support provide by the sector post qualification to better understand the causes behind and minimise that 39% drop off rate.
The challenges ahead for the heat pump sector in 2025 are significant, but they are not unbeatable. With the forthcoming Warm Homes Plan expected in Spring, policy certainty could be provided. This coupled with conformation of the continuation of government grants and clear market signals will provide confidence to the supply chain and see us build on the record-breaking year we’ve just had. The Heat Pump Association is committed to supporting its members and the wider industry through our work with Government and industry across the supply chain to accelerate the deployment of heat pumps.
10 BUILDING SERVICES & ENVIRONMENTAL ENGINEER MARCH 2025 Read the latest at:
www.bsee.co.uk
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