The UK government’s Heat and Buildings Strategy (HBS) aims to reach net zero emissions from buildings by 2050. 


Kaela Fenn-Smith

But along with commentators such as UKGBC, Carbon Brief and BRE, we don’t think it lays out a clear path to achieving net zero. Regulation seems the most likely route by which the government will address this gap.

The transition to low-carbon heating systems, mainly heat pumps, is a key pillar of the HBS. Practically all buildings will have to transition by 2050. But the strategy risks falling at the first hurdle because improving thermal efficiency in existing stock, often a prerequisite for heat pumps to work, is not comprehensively addressed by the HBS.

Another barrier is the make-up of the announced spending. Of the £3.9bn in the HBS, only 11% (£450m) will be made available to most domestic and commercial properties, via a boiler-upgrade scheme. From 2022 to 2025, £5,000 and £6,000 grants will be offered for installation of air- and ground-source heat pumps respectively. The remaining 89% of spending supports schemes for public sector buildings, infrastructure and social housing and off-gas-grid housing.

The HBS estimates there are around 30 million commercial and domestic buildings in England and Wales. To remove fossil fuel heating from them all by 2050, the HBS sets a minimum target of 600,000 heat-pump installations annually from 2028, rising to 1.7 million annually from 2035. Currently, only around 35,000 are installed annually.

Home heat pump system shutterstock_1233559804 Studio Harrmony PW040322

Home heat pump system

Source:  shutterstock / Studio Harrmony

New CBRE calculations show the rate at which heat pumps are installed must increase by 51% every year from now to achieve the 2028 target. Assuming subsidy continues after 2025 at the present level, the already limited proportion of heat pumps subsidised by the scheme will fall each year, reaching an estimated low of only 5% of the annual target by 2028. This begs the question: what is going to cause the rapid growth necessary in heat pump installations?

The government hopes the spending will cut heat pump prices and create a self-sustaining market where heat pumps are a competitive alternative to gas boilers.

But hope is not a strategy. The HBS does not say why £450m is enough to stimulate a nascent market into the market necessary in only six years’ time. Although the clean heat market consultation and new policies on labour-force capacity and (re)training make this more plausible, the HBS does not work back from its target to establish how the initiatives proposed will deliver the installations required.

That leaves the government with three options: spend far more; make the market-led approach more sophisticated; or regulate the market into existence.

Given post-pandemic fiscal constraints, we suspect the government is already resigned to the idea that regulation will be required, with the clean heat market consultation already admitting the need for ‘regulatory demand-side policies’. So, while regulation for existing buildings is conspicuous by its absence in the HBS, this does not mean it will be absent from the government’s evolving strategy.

Kaela Fenn-Smith is managing director of sustainability services and ESG for the UK and Ireland at CBRE