Heat Pumps – An Alternative to Gas Boilers

^{Last Updated: 01 April 2025}

The UK government’s initiative to promote heat pumps as an alternative to gas boilers has seen significant developments since its inception. 

Initially, in April 2022, £450 million was allocated to provide 90,000 households in England and Wales with £5,000 grants for heat pump installations. 

The latest developments in heat pump funding, policy shifts, and alternative heating solutions have several potential implications for social landlords:

Increased Financial Support

• In November 2024, the increase in grants to £7,500 per installation could make heat pumps a more viable option for social landlords upgrading properties
• Installation costs, ranging from £6,000 to £18,000, still present a financial challenge, particularly across large portfolios 

Policy Adjustments

• Landlords may struggle to determine whether to invest in heat pumps now or wait for other technologies like hydrogen to become viable
• Scrapping the 2035 gas boiler ban in January this year creates uncertainty about the long-term strategy for home heating

Subscription Based Models

• If heat pump subscription services (e.g., £60 – £70 per month) become widespread, landlords could avoid large upfront costs
• Long-term rental agreements may be needed, increasing administrative costs

Energy Efficiency Compliance

• Social landlords must meet Minimum Energy Efficiency Standards (MEES)
• Heat pumps could help achieve higher EPC ratings, but this may be limited without sufficient insulation improvements 

Policy Adjustments

• Landlords may struggle to determine whether to invest in heat pumps now or wait for other technologies like hydrogen to become viable
• Scrapping the 2035 gas boiler ban in January this year creates uncertainty about the long-term strategy for home heating

Infrastructure & Space

• Many social housing properties, especially flats, may lack the space for heat pumps, making any alternative solution more suitable
• Removing the one-metre boundary requirement, in November last year, may simplify planning, but installation in urban areas remains an issue

Resident Impact & Running Costs

• Landlords must ensure residents can afford ongoing energy costs. Heat pumps are more efficient, but electricity prices remain higher than gas, raising concerns about fuel poverty
• Educating residents on using heat pumps effectively will be crucial to maximising savings

Futureproofing Stock

• Landlords may need a mixed approach combining heat pumps, district heating (centralised energy centre), and future hydrogen options
• Government trials on hydrogen and further policy shifts will influence long-term investment decisions