Key lessons for deploying heat pumps at scale

Achieving the UK Government’s target of installing 600,000 heat pumps per year by 2028 will require a large scale and rapid increase in the rollout of heat pumps. In this blog, we will explore key learnings from Heat Pump Ready project teams who are working on innovative methodologies to achieve an accelerated, high-density deployment of heat pumps within several local communities.

Recent studies from the Energy Systems Catapult and the National Infrastructure Commission have found that all types of home can be suitable for a heat pump, and that 90% of homes are already suitable without further upgrades. The insights from the Heat Pump Ready programme have accelerated our learning on critical topics such as the electricity network’s capacity to accommodate heat pumps at scale, how to move from innovators to early adopters, overcoming upfront cost barriers, and scaling the supply chain.

In-depth feasibility studies were conducted by 11 projects across various regions in the UK, from which several crucial learnings emerged:

Raise awareness by leveraging early adopters and building supportive communities

Although awareness of heat pumps is rising amongst the UK population, there is still a need to increase knowledge of the technology and its suitability for UK homes in order to achieve wide spread adoption.

Heat Pump Ready projects have found that a community-led approach is a highly effective way of engaging homeowners and raising their awareness of heat pumps. Finding local advocates for heat pumps has proven to be a good strategy to scale up awareness raising initiatives, allowing early adopters to provide “social proof” and spread awareness and confidence within the local area. Samsung Electronics are utilising early adopters in Oxford as ‘show homes’ as part of their awareness raising and recruitment activities. Bristol City Council has utilised existing residents with heat pumps as ‘open home’ days for people to see heat pump technology first hand. In the Cherwell Heat Pump Ready project, case studies have been written about early adopters in the area. Other projects have found the importance of having a local representative of the project available in the area to build effective relationships with customers. For example, City Science is employing a community engagement officer to serve as a trusted contact with consumers throughout their entire installation journey in Fenland, Cambridgeshire.

Build supply chain capacity by fostering collaboration between installers

Upscaling heat pump deployment throughout the UK requires an increase in the capacity of installers and supply chains. Leveraging the capacity of existing SME heating businesses has been identified as vital to reach the target of installing 600,000 heat pumps per year. However, projects found that SMEs would benefit from additional support to take on the additional training and administration for heat pump installations.

To help with this, the Bristol Heat Pump Ready project has developed a local Installer Hub, facilitating collaboration and joint training initiatives between the primarily SME installer base in the area. This has helped alleviate the burden on individual installers and foster a supportive ecosystem where knowledge transfer becomes a cornerstone of growth.

Facilitating partnerships between larger and smaller organisations, where larger companies support the upskilling and accreditations efforts of SMEs, was also identified by a number of projects as key to scaling supply chain capacity in local areas.

Heat Pump Ready projects are also exploring how they can ensure local supply chains benefit from the Government’s £5 million Heat Training Grant and the new Low Carbon Heating Technician apprenticeship launched in Autumn 2023.

Engage with the Distribution Network Operators (DNOs) from the outset to understand and manage the impact on the grid

Understanding the current capacity of the local electricity network is essential when considering areas for accelerated high-density heat pump deployment. Heat Pump Ready projects found that engagement with Distribution Network Operators (DNOs) must be prioritised throughout the process, beginning as early as possible in the rollout of heat pumps in specific localities. Projects found that each DNO in the UK has varying levels of data availability regarding local capacity restrictions, and different processes for new connections, both on an individual and bulk scale. For example, some projects encountered challenges in identifying specific feeders to which homes were connected due to limitations in the data held by the relevant DNO.

To improve this process, Samsung Electronics engaged Scottish and Southern Electricity Networks (SSEN) as a partner in their Heat Pump Ready project. SSEN are installing additional monitoring capacity in local feeder stations so that they can better understand the impact of high-density heat pump deployment on the electricity network and assess the potential value of flexible operation.

At a country level, work is ongoing to improve DNO processes for new connections and data provision for installers which, based on the findings of the Heat Pump Ready projects, will be essential to support future wide-scale heat pump rollout.

Embrace different finance models to overcome the upfront cost barrier

The range of different finance offerings and competition in the market for heat pumps is increasing. Also, the increase in the Boiler Upgrade Scheme grant to £7,500 has reduced the cost differential between heat pumps and gas boilers and the government has recently consulted on whether to differentiate the level of grant for different circumstances, to help ensure a just transition to low carbon heat.  Nevertheless, there remains a large opportunity for additional financial products to help overcome the up-front cost barrier for heat pumps, particularly where more extensive upgrades to radiators, pipework or other services may be required.

Key findings from Heat Pump Ready feasibility studies suggest that a range of financial offerings are necessary to cater to the diverse financial circumstances of UK households, with low and stable interest rates being a vital component to make these offerings attractive. Projects have found that alternative funding models, where the up-front costs of installation are financed against the property rather than the individual, could present an attractive proposition for customers enabling longer term loans with lower interest rates. Although property linked finance propositions are not currently available in the UK at scale, a number of trials are ongoing for example, a Green Finance Institute trial with the Greater Manchester Combined Authority.  

The City Science project in Fenland, Cambridgeshire, also explored the use of the UK Lendology model, whereby home improvement loans for homeowners are funded by the local council at a relatively lower interest rate than private finance. However, the local authority was ultimately unable to proceed as the guarantor due to other funding priorities. The City Science projects in Fenland and Cherwell have therefore partnered with a private finance company, Hiber, that works directly with heat pump installers to enable them to offer 0% interest rate loans for 12 months with no deposit subject to eligibility.

Net Zero future

Heating domestic homes remains one of the largest emitting sectors in the UK. Heat pumps will be the primary means for decarbonising heating over the next decade and will play a key role in all 2050 scenarios on our pathway to net zero.

The learnings from Heat Pump Ready are intended to help the sector overcome barriers to heat pump deployment. Please visit our website for more information on individual project initiatives.

The Heat Pump Ready Programme  is funded by the Department for Energy Security and Net Zero, as part of the £1 billion Net Zero Innovation Portfolio (NZIP).