Heat pumps – a load of hot air?

We’ve all been hearing about the government’s green plan for the private rented sector. But are the plans actually as ‘green’ as they make out to be?

The government believe heat pumps could be the answer to help tackle the energy-efficiency problem in PRS homes.

This Property118 investigation looks at all the details to do with heat pumps and finds out whether they are as energy efficient as they claim to be.

How do heat pumps actually work?

There are different kinds of heat pumps but most use the same basic principle of heat transfer. Rather than burning fuel to create heat, the pump moves heat from one place to another.

During winter, the heat pump will absorb heat from the outside and release it inside. In the summer the pump does the opposite by moving heat from the air inside to outside.

While this sounds all good in principle there’s a lot more than meets the eye.

Cost of heat pumps

Installing a heat pump isn’t cheap. An air source heat pump can cost between £7,000 and £15,000 to buy and install.

Ground source heat pumps can cost between £15,000 and £35,000. The government launched a boiler upgrade scheme last year offering a £5,000 incentive to install a heat pump.

It’s worth remembering that the grant only covers the cost of the pump and not the installation.

According to a programme by the BBC, the government initially planned to issue 30,000 grants annually in England and Wales but only managed 12,000 in its first year.

When asked about the high costs of heat pumps in the programme, the Minister for Energy Security Graham Stuart said: “The price of heat pumps is coming down and we think that heat pumps with a rebalanced pricing system across the energy sector will become more and more competitive going forward.”

However, the government completely missed their target to install 600,000 pumps a year in 2022 with only 43,000 installed.

The BBC says at current rates of installation, it will take more than 400 years before every British home has a heat pump.

Even if some people can afford to pay, there is another barrier to hitting the government’s heat pump targets. The UK only has 4,000 trained heat-pump installers – it is estimated we will need 33,000 by 2028.

Rodney Townson from landlord association iHowz, says that the organisation have never shared the government’s ambition for heat pumps as a solution for lower carbon heating in the PRS.

“Tenants want safe homes which are affordable to heat and do not want technical heating solutions which can end up costing significantly more than existing gas central heating.

“In order for heat pumps to deliver efficiency of up to 300% they require a well-insulated property which is likely to require some form of mechanical ventilation with heat recovery to ensure sufficient air flow.”

Heat pumps are not suitable for many older properties without huge insulation upgrades, eg external cladding.

If you install a heat pump your EPC rating may fall

Though the plans have not yet become law, ministers have previously proposed that by April 2025, newly rented properties in England and Wales will need to meet a minimum EPC standard of C – tougher than the current E standard.

The regulation is also slated to apply to existing tenancies from 2028.

Having a heat pump installed on the property doesn’t automatically guarantee an EPC C rating.

Heat pumps use more electricity compared to natural gas and the way EPC’s are designed at the moment they take into account grading based on bills rather than carbon output.

However, a consultation on new EPC and minimum energy efficiency standards (MEES) requirements ended two years ago.

The government has given no response to it, leading to widespread uncertainty in the PRS about what is expected from landlords. Mr Townson has been writing to ministers since 2021 urging them to publish the new EPC and MEES requirements for the PRS.

He said: “As the UK transitions to a lower carbon emission approach to heating homes landlords need more support from the government.

“Landlords and other homeowners require greater clarity on what the new EPC/MEES standards will require, which is supported by a long-term scheme with adequate resources – installers, materials, funding and assessors.”

Landlords up and down the country are already struggling with rising costs and many are spending thousands of pounds upgrading their properties due to the government’s green energy push.

Mick Roberts, a landlord from Nottingham, previously told Property118: “Many landlords have spent thousands of pounds upgrading homes and we don’t even know what’s what yet due to the uncertainty around the new EPC targets.”

He said a lot of properties may need £30,000 spending on them just to get to band C.

“I’ve got to start telling tenants soon, ‘You can’t live here past 2028, the government say you can’t if the property is not a C, and your rent doesn’t pay for a C’.”

Tom Spurrier, of the UK Green Building Council, told the Telegraph: “We have currently got a metric that incentivises gas because it is cheaper.

“If you install a heat pump, which is powered by electricity, your EPC rating may fall.”

Landlords and homeowners in Scotland will need a EPC C rating from 2025

Scottish Green Minister Patrick Harvie revealed plans for homes to receive a lower environmental rating if gas boilers provide the heating.

Landlords and homeowners in Scotland will need to meet an EPC rating of C or above from 2025 – with the rules preventing the sale of some properties that have boilers.

Lord Willie Haughey, a businessman who owns a heat pump supplier company, said heat pumps may not be the answer due to Scotland’s harsh climate.

He told the Telegraph: “The truth of the matter is that heat pumps don’t work as efficiently in Scotland as they do in other countries.”

Lord Haughey also warns that heat pumps are noisy and will only heat water to 54C (129.2F) – that’s lower than the 60C recommended by the Health and Safety Executive to kill the legionella bacteria.

Ban on the installation of new gas boilers

Could these plans be coming to England anytime soon and will landlords be expected to install heat pumps instead?

The government previously stated that it aims to ban the installation of all new gas boilers in England by 2035 in rented and owner-occupied properties.

Comments made by Michael Gove on Times Radio last week signal the government may be backtracking on the proposal.

He said: “There are proposals to decarbonise our existing housing stock, which I think are the right direction to go.

“But the costs which some of those changes may impose on homeowners and landlords, I think that at this point in time, we do need to be careful about”.

Compared to installing a heat pump an installation of a fossil fuel boiler tends to cost around £2,500. Another issue is that heat pumps don’t work well in poorly insulated homes.

Homes need to be well insulated for heat pumps to be effective because the devices work at lower temperatures and so will struggle to get the house warm and keep it to temperature.

Mr Townson says that the government has not done enough on insulating Britain’s homes.

“Last winter the government spent almost £4bn a month to subsidise energy bills, yet no significant new funding has been made available to accelerate the insulation of Britain’s homes over the summer months.

“Clearly, the PM and the chancellor have forgotten George Osborne’s prompt to fix properties while the sun is shining.”

PRS made up of older housing stock

Mr Townson says the other problem is that the PRS is made up of older housing stock and many HMOs or leasehold flats have planning restrictions which make it impossible for heat pumps to be fitted.

“Many rental properties are HMOs or leasehold flats. There may be planning or lease restrictions which prevent or add additional administrative and direct costs, which prevent or make it unaffordable to fit heat pumps for these properties.

“The PRS has a high proportion of older housing stock, hence landlords’ concerns at the lack of any government announcement on the new EPC standards, beyond Mr Gove’s recent indication that it has been kicked into the long grass and will not be addressed this side of a general election.”

He says that councils need to relax planning restrictions along with fees for any insulation measures. It’s no wonder that landlords and homeowners are looking for cheaper options rather than installing a heat pump.

Mr Townson says that insulation is the most sensible solution.

“The best and most sensible solution to energy saving in the housing sector is Fabric First, which is draft proofing and insulation.

“This is a sensible solution as it reduces the need for energy to heat (and cool) homes and the solutions are independent of the specific energy source (mains electricity / solar / hydrogen).

Heat pumps might not be the answer

It remains to be seen whether the government will backtrack on its green energy push for the PRS.

We all want our homes to be as energy-efficient as possible but with the costs involved, heat pumps might not be the answer to the solution.

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