The Kensa Group was pleased to hear the chancellor is pledging to cut VAT to zero on green measures, such as ground source heat pumps, for the next five years.
Those installing heat pumps, which can cost upwards of £7,000, can expect savings of up to £2,000 on their final bill, according to the Heat Pump Federation.
The VAT reduction is a step in the right direction to incentivise the uptake of the low carbon technology in an effort to reach the 600,000 heat pumps per year by 2028 needed to help the UK achieve Net Zero by 2050.
Along with the forthcoming Boiler Upgrade scheme, which provides grants of £6,000 to those installing ground source technology, these measures will make renewable heating more affordable for many people.
However, Kensa says the Government needs to go further to tackle the energy crisis. Kensa is calling for the current bias in levies, causing electricity to be four times as expensive as gas, to be levelled out by properly proportioning them against carbon emissions.
Addressing this distortion, it says, will ensure that homeowners installing low carbon heat pumps can feel the financial benefits of the technology’s exceptional efficiencies at a time when people are looking to make as many savings as possible on their heating bills.
Ground source heat pumps remain among the lowest cost, lowest carbon electrically powered heating technology available. With three-quarters of the energy they used sourced directly from renewable sources, i.e. the ground, they are less vulnerable to fluctuating energy prices.
Kensa believes that the Government should invest in renewable heating infrastructure to create a 21st Century equivalent to the gas network. By mimicking the existing mains gas model and subsidising a ‘white box ground source heat pump’ inside every property, the UK could effectively tackle the energy and climate crisis.
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