The slow progress on decarbonising home heating won’t fix itself — and unless ministers act fast, the country risks missing vital climate targets while leaving low-income families stuck with rising bills says the Resolution Foundation.
Despite big emissions cuts elsewhere, emissions from heating homes haven’t budged in a decade.
Gas boilers, which heat 79% of UK homes, are now the second-largest contributor to household carbon emissions.
Replacing them with electric heat pumps is key but uptake is painfully slow — fewer than 100,000 were installed in 2024 compared to 1.5 million gas boilers.
The Climate Change Committee wants that figure to jump to 450,000 a year by 2030 but the numbers just aren’t moving. Installation costs are still too high — up to £13,000 without subsidy — and bills can actually rise for some households due to electricity’s inflated price tag.
To fix this, the Foundation says the government must rethink its approach, with new targeted support and smarter pricing.
It recommends a means-tested top-up grant of around £3,000, on top of the existing £7,500 Boiler Upgrade Scheme, to bring the cost of a heat pump closer to that of a gas boiler for lower-income households.
Supporting just a quarter of needed installations this way would cost £370 million a year.
But subsidies alone won’t cut it — electricity itself is still too expensive. A key reason? Green levies.
These charges — which fund renewable schemes and social programmes — add 5p per kWh to electricity, compared to just 0.3p on gas.
The Foundation outlines three ways to fix that: shift the levies to standing charges (making each unit of electricity cheaper but increasing fixed costs), move the costs to general taxation (saving the average heat pump user £280 a year but costing the Treasury £5 billion), or place the levies on gas instead.
That last option would make gas more expensive but give heat pumps a competitive edge. It would also be fairer for the 16% of households not on the gas grid.
To protect those most vulnerable, the Foundation suggests introducing a social tariff to shield 10.5 million lower-income households from any gas price hikes — costing just £310 million a year.
Without bold action on cost, price signals and fairness, the net zero mission risks stalling at the front door says the foundation with the poorest most at risk.
