Addressing the industry body’s concerns for the off-gas grid sector, Malcolm explains OFTEC’s calls for support for a multi-tech approach to off-gas grid decarbonisation.
The UK remains committed to achieving net zero by 2050 and the off-gas grid heating sector continues to invest and innovate to drive this ambition. Increasingly, consumers are also supportive of the need to reduce carbon emissions in their home, if affordable and practical solutions are offered.
What has been less clear is the direction of travel from government which has a vital role in instigating the policy levers and actively supporting industry by providing a clear road map.
Industry, consumers and government must all be aligned for the roll out of low carbon technology to be successful. That’s why whichever political party is in power must take a more open and pragmatic approach to decarbonisation policy. This means catching up with the progress industry has made and the reality on the ground for consumers in the current economic climate.
A rollercoaster
It’s fair to say when it comes to decarbonisation, the off-gas grid heating sector has been through a bit of a rollercoaster. Initially, there was a proposed ban on the installation of fossil fuel boilers in the home and in commercial premises from 2026 and 2024 respectively. These were then pushed back to 2035 after MPs and consumers raised concerns about the potential impact.
This uncertainty has made it more difficult for manufacturers and installers to make long term investment decisions and created confusion amongst consumers. As a result, the transition to low carbon heating has been slower than it could have been.
Heat pumps
The one area where government policy has been clear in recent years is on heat pumps.
The technology has been at the forefront of decarbonisation plans and been promoted as the primary solution for off-gas grid buildings. Heat pumps undoubtedly have a very important role to play and OFTEC recognises they are an ideal solution for many properties. That’s why we’ve invested in new training courses to upskill the next generation of heat pump installers.
However, despite government policy backing, slow progress has been made towards the target of installing 600,000 heat pumps a year by 2028 with the current figure around a tenth of that.
One of the main challenges is consumers aren’t fully on board. For many properties, particularly in older off-gas grid housing stock, the cost of installing a heat pump and making all the necessary changes for the technology to work effectively can be over £20,000, according to the government online calculator.
Combined with the disruption from new radiators, new piping and other improvements to the home that many properties will need, uptake from consumers has been slow.
Recent changes to the Boiler Upgrade Scheme to remove the need for energy efficiency improvements to claim funding were seen as a policy leaver to boost uptake. That said, the fundamental challenges for consumers remain the same, and the change could make the risk of a less optimal outcome more likely.
There is also a shortage of heat pump installers with tens of thousands more needed to reach the target the government has set. Alongside this, the wider industry of servicing technicians and the supporting supply chain needs time to grow.
HVO
Householders are rightly demanding choice, and an alternative solution on offer for off-grid homes is renewable liquid fuels. The industry has demonstrated through real world testing that fuels such as Hydrotreated Vegetable Oil (HVO) are an ideal replacement for kerosene with minimal disruption and cost to transition.
There is already an extensive and experienced industry of manufacturers, installers and fuel distributors ready to roll out the fuel at scale. Consumers are also supportive with a recent survey of oil heated households showing 85% want the option of making the switch.
The challenge for renewable liquid fuels is the opposite of heat pumps: industry and consumers are ready but government support and the policy mechanisms are not yet in place.
The Energy Bill committed the government to publishing a consultation on a Renewable Liquid Heating Fuel Obligation and the new government will need to deliver this. Alongside this, we’ve also been calling for an equalisation on tax duty.
Currently, the use of renewable liquid fuels for home heating is taxed. However, fossil fuels are not. This is counterintuitive and disincentivises take up. We’re calling on the new government to equalise the tax duties for renewable liquid fuels.
The roll out of heat pumps and renewable liquid fuels both demonstrate the importance of the government, industry and consumers being aligned. Both technologies are being held back because these three elements are not working together. So, how do we move forward?
The new government will have little wiggle room financially, so they need to adopt a practical and pragmatic solution. That’s why the direction of travel off-gas grid is multi-technology. If the government can provide equal policy support, consumers have the choice of which technology to adopt, and if we continue to train installers in both technologies, then we can make the change we need. We will work with the new Labour government to make this happen.
Image supplied by OFTEC shows a liquid fuel supplier filling a domestic tank with HVO.