The recently published Warm Homes Plan positions heat pumps as the primary, long-term solution for decarbonising home heating, targeting over 450,000 installations annually by 2030. Both industry and consumers now have the policy direction, but what is less clear is whether the UK has the right skills and the workforce to support this heating transition. Do we have enough installers for all these new heat pumps?

We have been exploring these challenges at Nesta for several years, with installer skills identified as one of our key priority areas. Our work has focused primarily on supporting existing gas heating engineers to transition into renewable technologies. This includes initiatives such as Start at Home, which enables heating engineers to install their first heat pump in their own property, as well as piloting a programme to facilitate peer learning and mentoring among installers.

However, meeting the required scale and pace of heat pump deployment will not be possible by relying solely on the existing plumbing workforce. There are two main reasons for this. First, the current installer base is ageing, meaning new entrants will be needed to replace those leaving the industry through retirement. Second, heat pump installation typically requires more time than a like-for-like boiler replacement and involves a broader skillset. As a result, overall workforce capacity will need to increase, not just adapt.

This chart below illustrates the point, where Heat Pump Association modelling suggests that a sizeable proportion of the future heat pump workforce will be made up of new entrants (in green).

In February 2025, Nesta reported on the barriers to plumbing and heating firms taking on apprentices. We saw this as a critical issue, because demand for apprenticeships is consistently outstripping supply. We found that businesses were concerned about the costs of hiring an apprentice, difficulty in finding the right apprentices, and finding the right college courses for them. Despite these challenges, apprenticeships were still seen as the ‘gold standard’ by employers and preferable to entirely college-based courses.

So, what can be done to encourage more firms to offer apprenticeship opportunities?

Fast-forward to 2026 and we wanted to revisit this question, and in particular, look in more detail at potential solutions. To do this, we undertook desk research and a fresh round of interviews with 20 sector experts across the UK.

A surprising amount has changed in the policy landscape over the past year, and there is still more to come. 

The Labour government has reformed the Apprenticeship Levy - now renamed the Growth and Skills Levy - with a stronger focus on directing resources towards younger learners and smaller firms. Under these changes, smaller firms will no longer be required to contribute 5% towards apprenticeship training costs, and all employers will receive a £2,000 incentive for hiring young apprentices (an increase from £1,000 previously).

Further reforms are still to be implemented, including changes to assessment, updates to apprenticeship standards, and the introduction of new apprenticeship units, which will also be eligible for levy funding. Of particular relevance to the heat pump sector is the potential revision of the Plumbing and Domestic Heating Technician standard. If heat pumps are incorporated into the core curriculum, rather than remaining an optional pathway, this could provide a meaningful boost to workforce capacity. However, some colleges may face challenges in delivering this in the short term due to constraints in tutor availability and equipment.

So, there are positive apprenticeship policy changes afoot, but how will these be received by firms?

It’s early days to know how all these changes will land with plumbing and heating businesses, but there have been some new signals from employers over the past year.

The most persistent barrier continues to be the cost of taking on an apprentice. Recent research by the Gatsby Foundation confirms that the financial cost of hiring heating, ventilation and air conditioning apprentices in the UK is significantly higher than in some comparable European countries. Employers highlighted that costs extend beyond wages to include reduced productivity - particularly in the first year - as well as the additional time required for supervision and training. While the government’s £2,000 incentive may help to offset some of these pressures, cost is likely to remain a constraint for many firms.

Beyond direct costs, wider business conditions also shape employers’ ability to engage. Firms reported limited headspace to respond to policy changes, particularly in a challenging economic environment. Looking at business sentiment across the economy, not just in plumbing and heating, the CBI’s 2025 Employment Trends Survey found that the proportion of firms planning to expand has halved over the past year, while a quarter of small-to-medium enterprises expect to reduce investment in training. This is partly driven by rising employment costs, but also by uncertainty associated with the very reforms intended to support them. This is a theme that has salience in the plumbing and heating sector and emerged consistently in our stakeholder discussions. 

For businesses, expectations of future demand for heat pumps will be a critical factor in decisions about whether to take on apprentices. Recent policy developments have sent mixed signals: proposals to scrap the Energy Company Obligation have introduced uncertainty for some employers, while the Warm Homes Plan has provided longer-term funding assurance for schemes such as the Boiler Upgrade Scheme.

Ultimately, both business and consumer confidence in the future heat pump market will be essential in enabling firms to commit to longer-term workforce investment and expansion.

What interventions could better support plumbing and heating firms that want to take on apprentices?

Financial incentives

The government’s £2,000 incentive is a clear attempt to address cost barriers. It’s too early to tell how effective this will be, but it is helpful to consider learning from existing pilot schemes, such as the MCS Foundation’s £2,000 incentive for employers taking on low-carbon heating technician (LCHT) apprentices. 

We heard that this and other pilot schemes were well-received by firms that were delivering heat pumps at scale, but not enough firms currently had the level of demand to take on an apprentice solely focussed on the technology - regardless of the incentive. Therefore, it is significant that the new government scheme will include the main plumbing apprenticeship, potentially making this an attractive offer to a much wider range of firms.

That said, it remains uncertain whether £2,000 is sufficient to offset the full costs faced by employers. And we also heard that firms aren’t always up to date with the latest incentives, which brings us to the next intervention.

Brokerage support

Brokerage services are an increasingly prominent feature of the apprenticeship landscape in England, delivered by a mix of local authorities and third-sector organisations. These services support small firms to navigate the system, understand available incentives, recruit apprentices, and connect with training providers.

We heard that different brokerage services offer slightly different things, but some have had good results from promotional campaigns, direct outreach (door knocking, cold calls, direct marketing) to local firms, and supporting firms through the whole process. Some offered their own financial incentives or helped firms identify others. Preliminary results shared with us suggest that these schemes can be highly effective at boosting employer engagement.

In 2025, the Edge Foundation made the case for further government investment in brokerage, which was subsequently reflected in the autumn statement: £140 million has been allocated for new pilots to be run by mayoral strategic authorities (MSAs). We understand that in addition to the types of services already run, the MSAs will be encouraged to provide a clearing house function within their patches. This could help would-be apprentices access different employers and colleges, for example, if their first choice doesn’t pan out.

Unfortunately, MSAs don’t cover the whole of England, so this limited investment won’t benefit every area in the first instance. But the government is hoping it will offer a proof of concept that can be rolled out more widely in future.

Shared apprenticeships

While reforms, incentives, and brokerage will lower barriers for some firms, they may not be sufficient for all. One model with potential for expansion is the shared apprenticeship.

Under this approach - delivered through flexi-job apprenticeship agencies (FJAAs) - the agency employs the apprentice and places them with different firms on a project basis. For smaller firms, this can offer a lower-risk route into apprenticeships, allowing them to meet and work with the candidate before committing to the full apprenticeship scheme. For others, it may provide a longer-term model better suited to project-based work.

There are already several regional FJAAs for the construction sector in England, and in Scotland, sector-specific ‘managing agents’ play a similar role and have higher apprenticeship completion rates. 

We heard that the business model can be challenging - as the FJAA or managing agent takes on the financial risk of gaps in an apprentice’s deployment. However, we could foresee this becoming less of an issue if the model became more popular.

At this stage, we have not identified a clear immediate role for Nesta to develop a new innovation project or policy research in this space. The technical education landscape is already supported by a number of well-established organisations, and we are continuing to monitor ongoing policy developments. We remain open to identifying where we can best contribute as the landscape evolves.

In the near term, our focus will continue to be on supporting routes into the sector for the existing workforce. Alongside this, a wider sustainable future mission goal is in stimulating demand for heat pumps, through tackling affordability, driving perceptions, tackling barriers and exploring new delivery mechanisms. Increased market demand is likely to strengthen business incentives to invest in apprenticeships, although we acknowledge there is an inherent lag between demand growth and workforce expansion.