Domestic Interim Heat Pump Tariff

Electricity, Tariffs, Monitoring & Providers

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Mars

(@editor)

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Joined: 5 years ago

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Topic starter 23/01/2024 4:02 pm

The Heat Pump Association (HPA) has released a document today outlining strategies to accelerate the deployment of heat pumps in the UK. The report, titled "Accelerating Heat Pump Deployment: Domestic Interim Heat Pump Tariff," addresses the pressing need to shift towards sustainable heating solutions and proposes a comprehensive approach to make this transition feasible and efficient.

Key Highlights of the HPA Report:

Urgency for Action: The UK Government's ambition to decarbonize domestic heating is largely dependent on the increased use of heat pumps. The goal is to install 600,000 heat pumps annually by 2028. However, this target is jeopardized by the current high electricity-to-gas price ratios in Great Britain, which are among the highest in Europe.
Disproportionate Levies on Electricity: A significant factor contributing to high electricity prices is the application of Environmental and Social Obligations, commonly referred to as levies. Approximately 85% of these costs are borne by electricity consumers, creating a market disincentive for adopting heat pumps.
Proposal of a Heat Pump Tariff Discount: The HPA proposes an interim Domestic Heat Pump Tariff Discount to address this imbalance. This discount aims to reduce the price of electricity used for domestic heating or hot water produced by heat pumps, thereby encouraging their adoption.
Financial Implications: The proposed tariff discount suggests a reduction in electricity prices for heat pump usage by 5p/kWh in 2024/25 and 2025/26, increasing to 6p/kWh in 2026/27. The estimated cost of this discount is around £533 million over three years, with funding options to be considered by the government.
Broader Recommendations: The report emphasizes the need for government consultation to address the imbalance between gas and electricity levies. It also suggests that any future policies should not rely on electricity bill levies for funding.
Implementation Timeline: The report proposes a temporary measure starting in the financial year 2024/25, with the possibility of extending the scheme if necessary.

The HPA's report is a critical step in addressing the challenges faced in the adoption of heat pumps and moving towards a more sustainable heating future. The full document provides a detailed analysis and is available for those interested in a comprehensive understanding of the proposals.

For a detailed read and deeper insights, I encourage you to explore the complete document.

HPA-Accelerating-Heat-Pump-Deployment_Domestic-Interim-Heat-Pump-Tariff.pdf

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Toodles

(@toodles)

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Posts: 2064

23/01/2024 4:27 pm

Will download and read! Everyone here is of course affected (well, all heat pump owners anyway) Remind me, are we getting close to a possible election date?;-)

Toodles, he heats his home with cold draughts and cooks his food with magnets.

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Toodles

(@toodles)

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Joined: 3 years ago

Posts: 2064

23/01/2024 7:58 pm

I have read through this paper and envied (not!) the person or persons trying to implement this; though I like the idea very much…HOWEVER WOULD THEY GET IT OFF THE GROUND!? There would appear to be a lot of variables in my mind and I wondered if this would be some sort of ‘cap’ that would be imposed on price. Lots of different tariffs and many consumers with varying proportions of their consumption being attributable to their heat pump to mention but two. I hope it (the proposal) will float but can’t help feeling that sinking is far more likely. Cynically yours, Toodles

This post was modified 2 years ago by Toodles

Toodles, he heats his home with cold draughts and cooks his food with magnets.

👍

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