HomeBussinessLabour adviser Mark Carney ‘lobbied Reeves for heat pump subsidies’

Labour adviser Mark Carney ‘lobbied Reeves for heat pump subsidies’

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HomeServe sees heat pump installation and management as a huge potential new market – but only if the Treasury can be persuaded to relax the rules around subsidies.

At the moment such grants – typically worth £7,500 each – can only be claimed by householders when they replace boilers with heat pumps or similar low-carbon heating systems. HomeServe wants to introduce a rental model for households who can’t or won’t pay the upfront cost of installing a heat pump.

Mr Harpin said: “We want to offer a heat pump rental model over 15 years.

“The number one hurdle that we’ve got is persuading the Government to change the wording of the legislation around heat pump subsidies. 

“That’s the £7,500 available for replacing domestic gas boilers with a heat pump. But the letter of the law says the grant is only available if you own the heat pump, meaning householders, so our rental model wouldn’t work.”

Mr Harpin said Mr Carney had used his access to seek a change in the law and had also co-signed an open letter to the Department for Energy Security and Net Zero setting out the proposal and its benefits for the UK’s attempts to reach net zero.

Mr Carney has also been pushing for similar changes in France, where Brookfield oversees a separate company involved in home energy upgrades. He recently used his contacts to secure a similar meeting with France’s President Emmanuel Macron, said Mr Harpin.

Brookfield said Mr Carney had not raised the issue of the boiler upgrade scheme with the Chancellor. It added: “Mark Carney has advised the Chancellor on a number of macroeconomic and investment topics, including in his personal capacity as a member of the National Wealth Fund task force.”

A Treasury spokesman said it did not give a “running commentary” on the Chancellor’s diary but added: “As part of general engagement with the industry, officials met with representatives of HomeServe back in April – before the election – where this was a topic of conversation. No further meetings of the kind have taken place. The grant scheme remains available only to private householders.”

A spokesman for HomeServe said: “Alongside other industry leaders and experts, HomeServe believes that increasing the take-up of heat pumps is critical to decarbonising UK homes. As an industry we are ready to support the Government in delivering a workable residential decarbonisation transition plan.”

Heat pumps are set to become big business in the UK, prompting a flurry of pre-Budget lobbying from companies wanting ministers to set the right financial and regulatory framework. 

The key problem is that installations typically cost between £7,000 and £15,000, whereas replacing gas boilers costs £2,000 to £4,000. 

The last government’s Boiler Upgrade Scheme is designed to reduce that imbalance by offering a £7,500 grant towards installation of an air source or ground source heat pump, which work by extracting heat from the atmosphere or the ground. Alternatively householders can claim £5,000 towards the cost of a biomass boiler.

The scheme is capped at £450m between 2022 and 2025, enough to cover only 60,000 heat pump installations. So far about 33,000 householders have received the grants, almost all for air source heat pumps – far below the last government’s target of 600,000 installations a year by 2030.  

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