A National Infrastructure Commission (NIC) recommended backing electrification as the “only viable option” for decarbonising buildings at scale to reduce the reliance on volatile fossil fuels, lower energy bills in the long term and meet the UK’s climate target.
The NIC suggested the government fully subsidises the cost of installing a heat pump for one-third of households, based on income, and offers £7,000 support to all other households to switch to a heat pump or heat network.
The Energy Saving Trust (EST) estimates it can cost between £7,000 and £13,000 to install an air-to-water pump, while ground source heat pump installations are estimated to cost between £14,000 and £19,000.
The NIC analysis of the impact of their recommendations on households, found the average household could save at least £1,000 a year by the mid-2030s compared to today, with this largely driven by the move away from fossil fuels onto cheaper low carbon electricity.
They said thanks to the scheme and taking advantage of additional discounts offered by energy suppliers, heat pumps can be cheaper than gas boilers to install.
Energy Security Secretary Claire Coutinho said: “No one should have to choose between cutting costs and cutting emissions - our pragmatic approach means we can continue to deliver on our ambitious net zero targets without unfairly hitting the pockets of hardworking families.
"From today, for some households starting prices for heat pumps could now be below the average gas boiler, as we have increased the cash grant by 50 percent to £7,500 – making our scheme one of the most generous in Europe.
“This will help thousands of people across the country reduce their energy use and keep their homes warm.”