Last week (as the picture shows), Mitsubishi Electric won another award when we secured the ‘Industry Initiative of the Year’ at the ACR News Awards held in London’s Grand Connaught Rooms.
‘Heat Pumps – The Financial Tipping Point Report’ is based on a survey of homeowners and heat pump installers and looks at the barriers to heat pump adoption.
It is always nice to receive acclaim from your industry peers for a report that seeks to increase the market for heat pumps – something we must do as a nation if we are to get anywhere near to the ambitious net zero targets.
However, the bigger story here for me was that in researching the report, it became clear that when people are talking about decarbonising buildings by utilising heat pumps, most of them are only really talking about houses.
Imagine the difference if more private commercial buildings can be converted from gas?
Russell Jones Content and communications manager
Clarity begins at home
While we do indeed need to convert the 1.6 million residential gas boilers sold each year to electric heating, that will take time, with even the Climate Change Committee (CCC) recognising the challenge in the recently published 7th Carbon Budget, as my colleague Chris Newman explains in this previous Hub article.
Awareness of heat pumps is growing year on year and 2025 is likely to see over 100,000 residential heat pump installations for the first time in the UK. That’s still some way off the 450,000 a year that the CCC suggests we need to reach by 2030 (and a long way from the 1.5 million a year by 2035).
Yet there is a more immediate opportunity for carbon savings by looking at heating in the commercial sector. This has been happening in public buildings since the start of 2020 and the challenge now is to mirror this in the private sector.
The Public Sector Decarbonisation Scheme (PSDS) has quietly been working in the background since 2020, with six separate opportunities for applications seeing a total of £3.67bn available to decarbonise buildings to 2028 (Phase 1 = £1bn; Phase 2 = £75m; Phase 3a / 3b / 3c = £1.425bn; and Phase 4 = £1.17bn).
We’ve already seen many heat pumps installed in public buildings such as this one at Salford Civic Centre, or Bournemouth University, where gas heating has been completely removed from a building.
Realising the potential
There are estimated to be around 2.1 million ‘non-domestic’ buildings in the UK and they are responsible for around 18% of the UK’s carbon emissions.
Each year more than 35,000 heating products are sold in the commercial sector and currently, heat pumps account for less that 5% of this market.
Imagine the difference that could be made to the nation’s overall carbon emissions if more private commercial buildings can be converted from gas?
Many global brands are already looking at this as they realise that we are nearing the end of gas heating in the UK. This is epitomised in case studies such as British Land, who recently removed gas from their flagship headquarters near London’s Marble Arch.
They realise that unless they start to plan for the end of gas, they risk ending up with a stranded asset that can’t be let and that can’t be sold for it’s true value.
Parity in pricing
Beyond the larger companies who are investing in renewable heating to reduce their carbon footprint or to future-proof their buildings, the challenge for most other businesses remains the price of energy.
As George Clarke has written about in this previous Hub article, the ‘spark gap’ is the artificial imbalance between the price of gas and the price of electricity, which can make renewable equipment more expensive to run.
Businesses face economic pressure from many angles with increasing prices, rates, wages and National Insurance costs, so asking them to invest in low carbon heating, without being able to clearly show a reduction in running costs is quite challenging.
Trade uncertainty and global conflict does means that the price of gas is likely to remain volatile and subject to further price rises. At the same time, we are slowly increasing the amount of sustainable electricity we produce at home, giving us more price and energy security.
Getting the ‘green levies’ removed from the price of electricity along with decoupling it from the price of gas is being looked at by government, so the future does look promising for commercial heat pumps.
We just need more businesses to realise that the end of gas is nigh and that they need to start planning accordingly. That’s where we can help if you’d like to come and talk to us.
Russell Jones is content and communications manager
