Energy — House of Commons, 2022-03-23
Topic: Energy
Gregory William Hands (Conservative, Centre-right): I thank the hon. Member for Southampton, Test (Dr Whitehead) for his constructive approach and his overall support for the scheme, which is most welcome I will deal with some of the points the hon. Gentleman raised. He is right on his first point: the ambition is to have 600,000 installations per annum from 2028. He is also right that there is £450 million allocated to the scheme over three years. It is a £5,000 grant, so he is right that that is a projected 30,000 grants per annum. I think his question, if I may repeat it, is how we get from 30,000 to 600,000 in the intervening three years between the end of the scheme and the start of the target. I think he asserted that that would not happen, so let me try to reassure him. The idea of the 600,000 figure, as I think he knows, is not that the Government will come along in 2028 and provide 600,000 heat pumps per annum; the idea of the scheme for the next three years is to pump-prime the private sector to be able to provide the alternative that we need So far, the private sector has responded well. Some companies have said that they welcome the Government grant scheme that is coming in and believe it is enough to allow them to bring down the cost of heat pumps to greater equivalence with conventional heating systems over that time. We believe, therefore, that we are putting in the right amount of funding, while being prudent with public finances, to provide enough support to help us to get to that 600,000 per annum target in 2028 The hon. Gentleman asked whether biomass boilers were also within the costings. They are, but we expect the number of biomass boilers to be relatively low. We expect the vast majority of the funding to go on heat pumps. He asked about the regulation of the scheme, and he is correct to assert that it will be up to Ofgem to oversee the scheme and the market. I would add that installers also need to be certified under the microgeneration certification scheme On the domestic renewable heat incentive, the hon. Gentleman is right that the scheme is closing to new applications next week, on 31 March, as I laid out earlier. It has been a successful scheme: up to January, 100,398 low-carbon installations had been successfully installed due to the DRHI The scheme has helped both to raise consumer awareness and understanding of low-carbon technologies, and to raise the quality of low-carbon heating installations, protecting consumers and improving their experiences. It has also supported the development of both product and installer supply chains. We believe that the boiler upgrade scheme will provide a simpler offer than the previous DRHI, and the grant model will directly address the up-front capital cost of low-carbon heat technologies, which is cited as a key barrier to deployment The hon. Gentleman asked whether heat pumps were effective in cases where properties are less well insulated. I can tell him that current evidence suggests that heat pumps are technically suitable for most buildings; around 90% have sufficient energy efficiency and internal electrical connection capacity to accommodate a heat pump system, which is encouraging I think the hon. Gentleman asked about the gap between the end of the previous scheme at the end of this month and this scheme coming into place in May. We consider that a staggered approach, with installer accounts created in April and applications starting in May, will offer the best overall level of service to installers and ensure that applications can be processed promptly. Installations commissioned from 1 April will be eligible for funding, subject to the other eligibility requirements being met. I hope I have answered all his questions; if there is anything I have missed, he can contact me afterwards and I am happy to write to him Heat pumps will play a substantial role in any net zero scenario, so we need to build the market for them now. This targeted support will help to grow the low-carbon heat supply chain to enable the proposed introduction of regulatory and market-based measures in the mid-2020s. Not only will investment in the scheme contribute to carbon reduction targets and increase consumer awareness of low-carbon heating solutions, but the creation of high-quality jobs will help with boosting the economic recovery, levelling up across the country and ensuring that we build back better. I urge the House to support this measure Question put and agreed to.