Environmental levies should be moved off of electricity bills to make sure it’s always cheaper to run a heat pump than a boiler, a number of business and civil society groups have said.
Led by environmental consultancy Third Generation Environmentalism (E3G), the consortium has called on the government to introduce a ‘Fair Heat Deal’ to make it more attractive to move from fossil fuel boilers to clean heat pumps. Such a deal would help ensure switching to heat pumps is affordable, helping the public benefit from cheaper energy bills, warmer homes and lower emissions.
A key recommendation for this deal is to shift levies from electricity bills. Currently 23% of an average electricity bill is made up of environmental and social obligation costs, which fund numerous decarbonisation programs, while gas bills are comprised less than 2% of such costs.
This imbalance between gas and electric bill levies is increasingly drawing criticism as it drives up the cost of switching to a heat pump for many. A report from the Environmental Audit Committee in December warned that the cost of electricity could cause the rollout of heat pumps to fail, as the technology must be made affordable for consumers.
As buildings are responsible for nearly a quarter of the UK’s total climate emissions, there is an increasing need to switch to low carbon heating solutions. The Climate Change Committee has said that heat pumps will play the largest role in decarbonising the UK’s heat supply.
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