Heat pump industry ‘could be wiped out’ as Labour issued warning over Net Zero decision

Under the scheme, households can receive grants of up to £9000 to switch from gas to a heat pump.

Home heating is one of the major obstacles as Britain transitions to Net Zero by 2050. Heat pumps, which use electricity to move heat from the air outside to warm homes, are seen as key to decarbonising the sector.

But ministers are reportedly preparing to axe the amount of money available to subsidise heat pumps as they search for funds to boost defence spending.

In total, the energy department is seeking £2billion in savings. The boiler upgrade scheme, part of its Warm Homes Plan, has funding of £2.7b, spread over five years.

Campaigners said that cutting the grants would leave Britain’s climate mission in “disarray”.

But green industrialist Dale Vince has argued that the grants benefit the well-off. He suggested heat pumps were being ‘mis-sold’.

Madeleine Gabriel, director of sustainable future at Nesta, a research organisation focused on social good, said: “Cutting Britain’s flagship low-carbon heating scheme would leave the country’s whole approach to climate and energy in disarray, in the middle of an energy crisis caused by our reliance on fossil fuels.

“Cuts to the scheme could effectively wipe out that whole industry, punishing many businesses and heating engineers who have followed the Government’s direction to invest in cleaner heating.

“The current energy crisis has been caused by the rising prices of gas imports and heat pumps are one of the best ways for the UK to secure the energy independence it needs.

“Turning away from them now would leave the UK economy and people’s electricity bills at the mercy of the next global crisis.”

Greg Jackson, founder and chief executive of Octopus Energy, which has been developing, manufacturing, selling and installing air source heat pumps across the UK, said: “Britain’s exposure to gas cost the Treasury £80 billion in the last energy crisis.

“The boiler upgrade scheme budget is just 0.5 per cent of that, and is key to getting off gas.

“It’d be remarkably short-sighted to try to enhance our defence by cutting our path to security.

“It’d also put thousands of skilled jobs at risk – the very people making Britain safer and cleaner in every postcode.”

Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit (ECIU), cited figures showing UK gas prices have risen to levels last seen in December 2022, the year Russia invaded Ukraine.

She said: “At exactly the moment that our dependency on gas is driving up our bills and harming our economy, reports suggest Government support for heat pumps could be cut.

“That risks households being unable to switch from gas boilers, meaning the UK is even more subject to the volatile global gas markets that have caused repeated bill crises.

“Heat pumps are a matter of national security as gas will increasingly be imported from the likes of Trump as the North Sea continues its inevitable decline.”

But, writing on X, Dale Vince, the founder of green energy firm, Ecotricity, attacked what he called the “heat pump myth”. Mr Vince was not responding to the reports of the subsidies being axed but offering a view on heat pumps as a technology.

He questioned claims that they were four times as efficient, saying this only held true in optimal circumstances. Even then, he said, because of the price difference between gas and electricity, bills would remain unchanged.

He said: “Heat pumps are for people that have plenty of money and who can afford higher bills – they only work as advertised in ideal circumstances, most ideal is underfloor heating.

“I’ve been using them for 20 years btw – I’m not against them, only against the mis-selling of them.”

Mr Vince has recommended using green gas, or biomethane, to heat homes. This comes from waste products such as farm waste, rather than fossil fuel reserves.

James Earl, CEO of Future Energy Networks, the trade association that looks after gas networks, said the Government should consider the role of hybrid heat pumps if it wanted to save money.

These use both heat pump technology but can switch to gas for cold spells or to avoid demand at peak times. He said their installation was cheaper and less disruptive than traditional heat pumps.

Mr Earl said: “If the Chancellor needs to find savings he should look at how you can make every pound spent through the Warm Home Plans go further.

“The Netherlands is backing hybrid heat pumps which, like hybrid cars, allow electricity to do the job most of the time and when the cold bites the gas kicks in to top it up.

“Consumers need more choice as they decarbonise. Hybrids are cheaper than normal heat pumps, so taxpayer cash goes further and it could help cut fossil fuels faster.”

A spokesman for the Department for Energy Security and Net Zero said: “Savings for the defence investment plan are a small part of DESNZ’s overall budget, which saw a significant uplift at the spending review.

“We will set out how we will fund essential investment in our national security this autumn.”