Report argues for discounted UK heat pump tariff to drive Installations

According to a national trade organization, in addition to longer-term government pledges to balance power prices, urgent action is required to reduce the expenses of running heat pumps. A recent industry analysis makes the urgent case that the implementation of an energy tariff discount intended only for heat pump customers is necessary to support the expansion of installation rates. The requests come from the Heat Pump Association (HPA), which is conducting fresh research on how the government can start fulfilling earlier promises to better balance the price of electricity in relation to natural gas. In its study, it recommended that, as a "temporary fix," an interim "Domestic Heat Pump Tariff Discount" be implemented as quickly as possible to lower the cost of electricity for buildings that convert to heat pump technologies. This would encourage more homes to switch from utilising fossil fuels as a heat source to electrified heating."With this Domestic Heat Pump Tariff Discount, the cost of electricity generated by a domestic hydronic heat pump for hot water and heating would be reduced to the point where that percentage of electricity would not be subject to levies," the association's report stated. With the implementation of this heat pump tariff discount, the cost of electricity used by hydronic heat pumps in Great Britain for hot water or residential heating would be reduced by 5p/kWh in 2024–2025 and 2025–2026, with a real increase to 6p/kWh in 2026–2027. Longer term, the HPA stated that it continued to pursue the eventual removal of present taxes from electricity prices.

Source: Heat Pump Association