E3G today welcomes the publication of the Future Homes Standard consultation by the UK government, which sets out requirements that will ensure newly built homes are “net zero ready” from 2025, with heat pumps as standard.
The document confirms: “We found no practical way to allow the installation of fossil fuel boilers while also delivering significant carbon savings. As such, we do not expect fossil fuel heating, such as gas, hybrid heat pumps and hydrogen-ready boilers, will meet these standards.”
Juliet Phillips, Senior Policy Advisor at E3G says “Ensuring that all new homes are built highly efficient and with clean heat is perhaps the most popular and common-sense of climate policies. We’re delighted that the government has finally confirmed that all new homes must be built to new zero standards from 2025. This is great news for home-buyers, who will save money on energy bills and avoid the need for costly retrofits in the future. It’s also great news for the UK’s clean tech industry, providing the long-term policy certainty needed to boost investment in skills and supply chains.”
The requirement for all new homes to be built highly efficient was originally proposed in 2006, which would have required that from 2016 all new houses would be ‘zero carbon’ and generate as much energy on-site, as they would use in heating, hot water and lighting. However, this proposal was scrapped in 2015. About 1.5m homes are estimated to have been built without these low-carbon fittings since 2015. The cost of retrofitting these homes is likely to reach £30bn to £45bn.
Additional economic opportunities and benefits associated with the standard include:
- Unlock investment in UK supply chains to boost growth. The Future Homes Standard (FHS)) is central to realising the government’s ambitions for the UK to be one of the largest markets in Europe for heat pumps by the end of the decade; unlocking up to £1bn investment in UK manufacturing by 2028. A strong heat pump manufacturing base could contribute £500 million GVA per annum in export opportunities, and this growth could support up to 6,000 heating engineer jobs annually to 2028.
- Lower costs for homeowners. Future-proofing homes from 2025 will avoid the future need for expensive retrofits. It is much cheaper for homeowners if the home is already built net zero ready: installing a heat pump costs housebuilders an average of £5,750, compared with an average retrofit cost of over £13,000. The cost of running a heat pump in a well-insulated home is already competitive with that of a new gas boiler. Compared with 2021 new build standards, homeowners of properties built to the FHS could save up to £450 a year on their energy bills while reducing CO2 emissions by 31%.
- Provide clarity for housebuilders. Leading housebuilders want regulation that provides a level playing field and rewards ambition, quality, and social responsibility. Major housebuilders, such as Redrow and Vistry Group, have already shifted their operating models and supply chains in anticipation. The financial services and energy industries are primed to supply builders and their customers with the services and finance they need.
- Bolster the UK’s energy security. The UK must urgently reduce costly consumption of gas, to relieve our economic exposure to volatile gas markets. Designing homes to integrate heat pumps at the outset will insulate future stock from gas reliance. Replacing a gas boiler with a heat pump reduces a home’s gas use by over 70%, assuming the makeup of the electricity grid remains constant. Government has identified “accelerating the transition to ultra-efficient electric heat pumps” as key to mitigating the UK’s overdependence on fossil fuel gas, nearly half of which is consumed through heating each year.