unsplash asset-image.jpg 22.1.2024
With a £7,500 Government grant for heat pumps announced in October 2023, high gas prices, and VAT already cut to 0%, heat pumps are currently all the rage. And this is very important, as heating is still one of our most carbon-intensive activities.
Lux Nova has been supporting all aspects of the heat pump market, whether in relation to district heating, innovative network solutions, industry groups or enabling the roll-out and funding for residential customers and small businesses. Below, we have collated some of our experience:
We have been a market leader in district heating solutions for years. We have acted for house builders, funders and ESCos, and have been a part of the Triple Point Heat Networks consortium since 2018, first on the HNIP (Heat Networks Investment Project) and more recently on the GHNF (Green Heat Networks Fund). Through HNIP and GHNF, we have helped the UK Government to deploy hundreds of millions of pounds of support for low carbon heat networks.
In doing so, we have assessed hundreds of district heating grant funding applications, each with their own specific location, technology, offtake strategy and heat supply strategy. One trend has been unmistakable: the prevalence of new projects using heat pumps is now overwhelming. Whether the heat source is mine water, sewer water, rivers, the ground or the air, heat pumps are being put to work in heat networks: they are the present and the future.
Away from traditional district heating networks, we have been advising Kensa Utilities Ltd on their innovative shared ground array offering, whereby Kensa pay for, install and own an ambient loop ground source heat pump network in a locality. This takes responsibility away from the developer and homeowners and delivers utility-like heat to the front door of housing developments. In return for a small connection fee, each house has access to the ambient heat from the shared ground array. A small ground source heat pump fitted in each home (in the space normally occupied by a boiler) uses this to provide heating and hot water at lower cost and greater efficiency than other solutions.
But for a nascent market, a solid regulatory framework is at least as important as financial support. This is why Lux Nova recently advised the Heat Pump Association, an industry body representing installers and suppliers of heat pumps. Our corporate structuring work has ensured that the HPA is structurally and legally set up soundly, to ensure it can continue its important work, promoting heat pumps as a low carbon solution.
We also contributed to a number of industry taskforces organised through the Green Finance Institute’s “Coalition for the Energy Efficiency of Buildings”, in relation to clean heat and demand aggregation in the residential sector.
The roll-out of heat pumps in the residential sector is challenging, but picking up pace. In the UK, the Clean Heat Market Mechanism (CHMM) scheme will launch this year. In the first year of the scheme (April 2024 to March 2025) manufacturers’ heat pump sales must be equivalent to 4% of their fossil-fuel boiler sales that year. This requirement will increase to 6% in the mechanism’s second year. Failure to comply will result in fines. Some installers are saying that they will add the additional regulatory cost to their boiler installation charges, meaning that the cost differential in upfront installations would reduce, in favour of heat pumps.
Over recent years, we have been supporting a number of private and public initiatives, to enable and encourage small businesses and homeowners to install energy efficiency measures in their homes. Esco-in-a-box, ELPS Energy and One Zero are just three examples of our work, with others already underway and awaiting completion in 2024.
We are looking forward to supporting the heat pump market in 2024 and beyond, until we have successfully decarbonised our homes and industry.
Publicly available articles and resources:
Carbon Brief analysis: https://www.carbonbrief.org/guest-post-how-the-energy-crisis-is-boosting-heat-pumps-in-europe/
Debunking heat pump myths: https://www.linkedin.com/pulse/debunking-heat-pump-myths-dr-jan-rosenow/?utm_source=share&utm_medium=member_ios&utm_campaign=share_via
Redefining Energy podcast (Episode 94: “Heat Pumps are hot”): https://open.spotify.com/episode/6pX3liWqWRSpWN1iJvlZrn?si=249e5b9474414f0f
Which? Consumer information: https://search2.which.co.uk/search?asug=&mainresult=mainresult%3Ayes&intcmp=GNH-Search&w=heat+pumps&_gl=1*1jsg0rv*_ga*MTE3NzA3OTMzMi4xNzA1MzMxMTcx*_ga_B458RCR961*MTcwNTMzMTE3MS4xLjEuMTcwNTMzMjQ1MS41NS4wLjA.
