The Rural Heating Challenge

Late last year, the long-awaited Heat and Buildings Strategy was published setting out details of a £3.9 billion package of support to decarbonise heat for buildings. It was clear that Government sees rural households as a priority, noting that off-grid homes typically use higher carbon fuels and pay more for their heating and therefore may save more from a switchover to a low carbon option. In England, 1.1 million rural off-grid homes on fossil fuel heat sources are using either heating oil (78%) or LPG (13%) and thus are faced with volatile and often high costs.

As part of the Strategy, a consultation was released setting out a proposal that it will no longer be possible to replace a fossil fuel heating system with anything other than a low carbon heating system from 2026, and for commercial businesses from 2024. Whilst the details are still to be ironed out (we await outcomes from the consultation) this could mean that a broken-down boiler must be replaced with a heat pump or similar low carbon option from 2026. The forthcoming regulation of heating system replacement in off-grid properties represents a major challenge for rural households, the heating industry and policymakers.

Despite the presence of the Boiler Upgrade Scheme providing grants for heat pumps and biomass boilers, regulation from 2026 seems likely to be unpopular and a challenge to deliver. Questions will include the affordability of the upfront cost, challenges associated with retrofitting older buildings, the ability for rural electricity networks to cope with increased demand and even the impact of weather erosion in some exposed and coastal areas. Consumer behaviour will undoubtedly also change to work around any new regulations with great potential for an increase in early replacements (buying a new boiler before the ban) or maintaining of boilers beyond typical life span.

Implementation may however be possible with the right level of communication, planning, local support and technological developments such as reduction in the cost of heat pumps and emergence of new low carbon alternatives such as liquid fuels using biomass. Gemserv works at the forefront of these issues, using our detailed understanding of the array of needs specific to rural communities and policy to help shape a transition to low carbon heating that is fair with nobody left behind.

If we genuinely believe in tackling the climate emergency, it is increasingly difficult to argue for continued delay from those who can afford to replace their heating systems. We must however ensure fairness and provide support to those who cannot afford the upfront cost of a new system, or who are in dire need of help due to the ongoing cost of energy.

Balancing the needs of decarbonisation with affordability and creating the conditions that enable households and businesses in rural areas to make the transition to low carbon heating is a challenge that will require concerted effort and co-ordination. We await the Government’s response to its consultation later this year and it will be very interesting to see conclusions with respect to the timescales and current economic landscape. Whatever the outcome, those working in rural areas to achieve heat decarbonisation have a difficult challenge, providing guidance, tools and breaking down barriers for those making a swich whilst reassuring and supporting those who may need help.

Rory Mathews – Senior Economic Analyst, Gemserv

Gemserv work with the low carbon sector to provide the evidence base for policy change and offer insights to shape markets. If you are interested in finding out more about our heat decarbonisation strategy work decarbonisation, please contact rory.mathews@gemserv.com.