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Could Wales lead the UK’s ‘heat pump revolution’?

The Welsh Government recently closed a consultation on its draft Heat Strategy, setting out its policy priorities through to 2050 for domestic, commercial and industrial heat. They’ve been more explicit than Westminster about the best clean heat choice for homes, so could Wales now lead the way for the rest of the UK?

Nesta has responded to the consultation, and it’s fair to say there is a lot to be positive about. The Welsh Government’s vision for low-carbon heating for homes is set out clearly; “Homes will be thermally efficient and served in the main by heat pumps”. The strategy timeline goes further, envisaging a ‘heat pump revolution’ of 30,000 installations per year by 2030.

The essential actions are now clear - the Welsh Government will need to play its part in rapidly growing the heat pump market over the current and next Senedd term. This means tackling the cost and appeal of heat pumps, and ensuring we have the skilled workforce in place to install them to a high standard.

But just as importantly, the Welsh Government must also lay the groundwork for the heat pump revolution. We need a suite of new policies that will incentivise, motivate and enable a first wave of early adopting households, leading the way for the rest of Wales and potentially the rest of the country.

These are the four areas which we think should be the most important policy priorities right now:

1) Focus on ‘heat pump-ready’ homes

We should avoid creating the impression in householders’ minds that deep and extensive fabric retrofits will be necessary to decarbonise all homes.

Our rough estimate is that about a quarter to a third of homes in Wales might be able to get a heat pump in 2023 without needing any additional fabric retrofit.

The Welsh Government should focus policy on these homes for heat pump installations in the short term to deliver its objectives.

Public messaging should focus on positive attributes that might make a home more heat pump ready - such as a high EPC, having wall and loft insulation, being a relatively new build, having a hot water tank and enough outside space.

No home should have a heat pump installed without a thorough assessment, but messages which focus on potential deficits in readiness may be enough to put people off taking even the first step to get the right information.

2) Urgently reform planning requirements

Overly strict planning rules, especially in urban areas, need to be relaxed. Restrictions around noise, proximity to windows and neighbours’ eyelines all deter take up.

Planning is devolved, and the largely arbitrary distance requirements intended to address noise concerns from air source heat pumps are much more stringent in Wales – they have to be 3m away from a boundary but just 1m away in England. These distance requirements, as well as restrictions on the size of heat pumps that can be installed, are too blunt a tool for managing noise levels and constrain heat pump adoption in Wales.

We think the Welsh Government should remove the restrictions on air source heat pump size and distance contained in the permitted development rules (which govern the home improvements people can make without requiring council approval). Instead, the rules should focus on ensuring compliance with the noise rules contained in the Microgeneration Certification Scheme, which set out what a good heat pump installation looks like.

Moreover, given that background noise levels vary hugely depending on context (i.e. it is quieter in remote rural areas than in dense inner cities), it might make sense to let noise limits vary to take account of this

3) Provide targeted finance and support

The Heat Strategy identifies a clear role for finance as well as advice and support to help people understand what the best choices are for their home.

Our work with the Development Bank of Wales found a real appetite amongst homeowners for publicly funded finance products to help homes decarbonise, such as green home upgrades or retrofitting works. We’ve shown that aligning these products with heat pump targets would maximise the CO2 reductions for every pound spent.

We hope to see the Welsh Government supporting the Development Bank of Wales to pilot a finance product for homeowners in 2024.

4) Tailor decarbonisation and fuel poverty strategies for their different goals

Although we recommend that the Heat Strategy should initially aim for ‘quick wins’ by focusing on houses that don’t need retrofitting, we cannot overlook the ongoing role that fabric retrofit programmes play in tackling fuel poverty, and improving health and wellbeing.

The Welsh Government is proud of its Warm Homes Programme, one element of which is helping low-income households to improve their energy efficiency.

Whilst the programme has a dual objective of ‘tackling fuel poverty and the climate emergency’, the eventual implementation of the Heat Strategy should see two streams of retrofit policy, one for decarbonisation and one for fuel poverty,

We must, of course, focus on the shared social value that net zero will deliver - cutting emissions and lowering system costs, but it is important that they are understood as different goals that need different approaches, and governments can and should get comfortable with that in order to design effective retrofit policies.

Deciding the destination

The Welsh Government has considerable influence over what happens to homes in Wales, both directly and indirectly.

Many aspects of housing policy are devolved, including lots of levers over the social housing and private rented sectors, building standards, energy efficiency programmes, and potentially green finance for homeowners.

Additionally, signals from governments are themselves just as important. If you’re a household or aspiring heat engineer in Wales, the direction of travel is now clear - heat pumps for most homes.

As it moves to its action plan, and ultimately to delivery, we’d like to see the Welsh Government being loud and clear about the decision it’s made and the evidence that backs it up. That will give citizens and consumers the confidence and certainty needed to invest in a net zero future, and potentially provide a pathway for the UK as a whole.

Read our full response to the Heat Strategy consultation here


Andy Regan

Andy Regan

Andy Regan

Senior Mission Manager, sustainable future mission

Andy works within the Nesta Cymru team as mission manager for a sustainable future.

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