NIBE REACTION TO THE 2020 BUDGET

NIBE fully supports the Governments ambitions to phase out fossil fuel heating and encourage the further uptake of low carbon heating in UK homes and buildings. With buildings responsible for a significant 40% of UK emissions, decarbonising them with available low carbon technologies is crucial to developing the green economy the Government has committed to. Changing the way we heat our new and existing buildings is essential not only to meeting net zero by 2050, but also for tackling fuel poverty and ensuring that homes are comfortable and affordable to live in.

NIBE therefore welcomes the decision to accelerate the much needed deployment of heat pumps in homes and small businesses. The announcement of a new Low Carbon Heat Support Scheme is particularly promising given that this will see £100 million delivered through grant-funding in 2022 - 2024; this will make low carbon heating much more accessible for consumers. The details of the scheme are yet to be developed, but this is a welcome announcement.

Households and industry will play a joint role in moving away from fossil fuel heating in the years ahead, and it is critical that solutions are within consumer reach and affordability so that they can enjoy the benefits. NIBE therefore supports the decision to extend of RHI until March 2022 for heat pumps, biomass and solar thermal, to maintain existing support for low carbon heating before the new scheme comes into play. Its also good to see the introduction of Tariff Guarantees for Non-Domestic RHI funding.

In addition, the government has committed funding as part of the National Skills Fund to improve the technical skills of adults across the country. The government will consult widely in the spring on how to target this fund most effectively. The aim of the fund is to enable individuals to train and retain over the course of their lifetimes and for employers and government to help address the skills gaps that hold back productivity. This is a welcome announcement for the low carbon heat sector where upskilling and retaining will be needed as we transition to a green economy.

The Chancellor has also committed to making gas and electricity rates equal by 2025. This will involve increasing the Levy placed on gas in 2022/23 and freezing the rates on electricity. This is part of a move towards better reflecting the carbon content of fuels and achieving parity between the two fuels over the coming years.

Phil Hurley, Managing Director of NIBE commented:

“The budget today is a significant step in the right direction and will open up low carbon heating solutions to homes and businesses in the UK. Heat is one of the more challenging areas of the economy to decarbonise and the UK will not be zero carbon by 2050 unless we phase out high carbon heating. Heat pumps have already received rightful recognition for their carbon saving potential and efficiency, and the announcement of the extension to the RHI and this new grant scheme builds on this further. Addressing the upfront investment required to support low carbon heat uptake is key if we are to see mass deployment. We now look forward to the implementation of this promise.

Improving the energy efficiency of our buildings is key to reducing emissions however, property performance was not referenced within the budget and no additional support for efficiency improvements has been provided. This is disappointing, however I look forward to the government’s buildings roadmap expected in the summer which should take a holistic approach to improving our buildings and transitioning to low carbon heat.”

 

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