In the News
UK government offers consumer subsidy for heat pumps
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19th October 2021
The UK government is offering a £5,000 grant for people swapping their gas boilers for low carbon heat pumps.
Ostensibly, this is good news and you should think about how to draw a demand and supply diagram. Will this mark the beginning of the end for the gas boiler?
However, let's evaluate this a bit further.
The £450m allocated will only cover 90,000 heat pumps - which won't make much of a dent in the UK's carbon emissions. There are north of 30 million homes in the UK so this subsidy covers less than 0.4% of homes.
Equally, who will get the heat pumps? The first to apply? Those with most knowledge of the market? Or only those with the money and suitable properties to make this viable.
So, the distributional effects are unclear.
And what about the electricity used to power the heat pumps - if it comes from renewable sources, then all well and good, but if it isn't what is the net effect on carbon emissions?
Will heat pumps reduce energy bills for households? Probably not at the moment but hopefully yes in the future as industry technologies advance. Prices for heat pumps should also fall in the long run due to economies of scale in production.
The Green MP Caroline Lucas adds to the critical evaluation of this government policy below.
A heat pump in a poorly insulated home just won't work. It’s like buying a teapot with cracks in it: leaky, inefficient and a waste of money. We need joined-up action on climate change & a *comprehensive*, well-funded home insulation scheme - not token gestures
— Caroline Lucas (@CarolineLucas) October 19, 2021
Government to offer homeowners in England and Wales subsidies of £5,000 from April to help them replace old gas boilers with low-carbon heat pumps https://t.co/OlG5bdvPNx
— BBC News (UK) (@BBCNews) October 18, 2021
"Modest levels of insulation are absolutely sufficient for a heat pump. It doesn't have to be 100% air tight"
— BBC Radio 4 Today (@BBCr4today) October 19, 2021
Jan Rosenow from the University of Sussex, says a heat pump's running cost is slightly more than a gas boiler due to electricity priceshttps://t.co/T6c1JZFzck #R4Today
How to replace your old gas boiler with a heat pump https://t.co/GfyqPyqYSk
— The Independent (@Independent) October 19, 2021
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