Scotland enjoys strong public support in its ambitions to reach net zero. And when it comes to decarbonising home heating – a fundamental step in reducing our carbon emissions – the technology and tools are available and we have financial encouragement in the form of government grants.

But we are still missing one vital ingredient without which we cannot hope to reach net zero by 2045. There are simply not enough trained installers in Scotland to replace gas and oil boilers with low-carbon alternatives – in fact we need about 15 to 20 times the current workforce to have any hope of reaching our legally-binding targets.

For this piece we have interviewed industry representatives to understand different perspectives on how the industry may develop over the next decade and have used these insights to make projections about the size and shape of the heat pump installation industry over time.

This is intended to provoke ideas and discussion about what it will take to attract, train and deploy a workforce 20 times the size it is now and how jobs in the industry may transition over time as the industry expands.

There are an estimated 210 companies operating in Scotland's heat pump installation sector, with 200 to 400 installers delivering approximately 3,500 installations per year.

To reach the Scottish Government’s own net zero targets they have targeted 170,000 low carbon heating installations per year by 2030. On face value, this looks like it would need a 48-fold increase in the number of installations and installers in just seven years.

However, Nesta’s report How to scale a highly skilled heat pump industry (July 2022) identifies that although there are currently between 20 and 25 heat pumps fitted per trained installer per year, this could increase to around 35 to 40 installations with the productivity gains that come with a more established market and where these heating engineers are focused on installing heat pumps alone.

This number is backed up by the businesses we spoke to, with one owner estimating they could be delivering 35 to 40 installations per qualified installer per year.

This gives us a more achievable, but still very challenging, target of around 4,000 installers in Scotland by 2033 – a 15- to 20-fold increase.

To achieve this we need all areas of the industry to expand, creating capacity and providing support for newly trained installers or apprentices to gain hands-on experience in the early stages of their careers.

Each year between now and 2030 we need an increasing number of new entrants to join the industry. Our interviews with those working in the industry suggest that new entrants will need a good amount of hands-on experience early in their careers before working more independently.

This would indicate that new entrants will need to join existing companies, rather than becoming sole traders. However, small companies may be unable to bring in large numbers of inexperienced workers and support them adequately with experienced installers. Therefore, we could see the early years of this transition being led predominantly by medium and large sized businesses. We have already seen companies such as Octopus Energy train their own installers and other energy firms such as E-ON and Scottish Power following suit or contracting out to larger plumbing companies. Politics may also put increasing pressure on these larger companies, as suggested by one of our interviewees.

Using the assumptions above we can estimate the likelihood of new entrants to join the industry in each bracket:

• 15% join as sole traders. These may be heating engineers and plumbers who are already sole traders who retrain to offer heat pump installations alongside their existing work.
• 10% join small companies. Experienced heating engineers who transition into, or set up, small companies. Numbers are limited as small companies may struggle to scale up quickly.
• 25% join medium companies. Medium-sized companies have more capacity to take on apprentices and early-stage installers and provide support.
• 50% join large. Power companies and large plumbing contractors with ambition to scale, train and support their own workforce.

The industry is not only shaped by new entrants joining it. People look for and create opportunities that suit them both in terms of improving pay as well as meeting the lifestyle that they want.

For example, over time those who have gained experience working in medium and large companies may look to establish firms of their own or form partnerships or micro-businesses.

There are also considerations around the ideal size for a heat pump installation company and how it is made up of different skills, aside from installers.

By taking into consideration the movement between small, medium and large companies, we can reprofile the brackets at year 5 to show how this has an effect on the true growth of each size of business.

Over time, we may see a move away from larger companies back towards small and medium sized companies. There will be much higher numbers of experienced installers who may want to establish themselves into small businesses and to secure higher incomes. While, at the same time, young and ambitious companies that want to grow to become more cost effective will cross the barrier into the medium sized businesses bracket.

There may also be some growth in sole traders as a secondary market of heat pump repairs and replacements become more commonplace. After 10+ years the industry may settle into a shape that is more static as well as more akin to what we see just now.

We can foresee a future industry that is initially led by high growth in the medium and large sized businesses, before installers gain experience and begin to move, forming small companies which then grow in size into medium sized companies.

This is based on industry perspectives but it is only a projection – an informed guess – as to the way we can reach around 4,000 heat pump installers in Scotland by 2033. But it is an important challenge to consider. If the industry is indeed going to look something like this, then there are specific support mechanisms and policies that need to be considered in advance to facilitate this transition.

The types of support and policies that would support the growth we have projected here, could look something like:

• Low-carbon heating business start-up grants
• Bespoke business growth training programmes for low-carbon heating firms
• Access to free HR and legal advice to support small companies to hire staff
• Staged training for installers to get started quickly before bringing in new skills

This is a projection and if it is way off the mark and the industry will be predominantly made up of sole-traders, for example, support mechanisms and policies would need to look different.

If we want to decarbonise our home heating at the scale we need to reach net zero, what matters is that we start acting now to build the right size and shape of industry to deliver low-carbon heating in the future.