The heat is on

As energy costs continue to increase, the CLA examines the alternative heating systems available to members
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The CLA has long lobbied the government to ensure that the impact on rural communities and off-gas grid homes is addressed in any emerging legislation designed to tackle climate change. The Department for Business, Energy and Industrial Strategy’s proposals on phasing out fossil fuels in off-gas grid homes and buildings, which we commented on in January 2022, is even more relevant against the backdrop of the current cost-of-living crisis, as well as fuel supply concerns arising from the Russia–Ukraine conflict. Russia provides 13% of UK oil imports, and reduced supply is causing domestic fuel price rises.

Landlords are already being encouraged to switch to alternative heat technologies and make energy efficiency upgrades to their properties. In his spring statement, the chancellor announced a VAT zero-rating for the purchase and installation of certain energy saving materials in residential accommodation, which will benefit both rented and owner-occupied sectors until 31 March 2027. The CLA lobbied for this and is pleased to see it adopted.

While incremental upgrades such as insulation and draughtproofing can be impactful for many rural properties, government’s focus on phasing out fossil fuels to meet its target of net zero by 2050 remains.

Alternative heating systems

The government continues to favour heat pumps as the main alternative fuel type under this agenda, which the CLA finds disappointing, as many members have shared horror stories of heat pumps’ performance and installation. We are encouraged by a few success stories where a property has been fully upgraded and heat

pumps installed, but these stories usually have very high costs attached to them.

If you are considering a heat pump for your property and have installed any Energy Performance Certificate (EPC) recommended loft or cavity wall insulation, you may be eligible for help under the Boiler Upgrade Scheme, available for consumers from 23 May until 2025. Your installer, who needs to be Microgeneration Certification Scheme (MCS) certified, will apply for the grant on your behalf, and this will be deducted from the price you pay. MCS-certified installers can be difficult to find in rural areas, so you may want to check at the beginning of your research. The voucher will be worth £5,000 for air-source heat pumps or biomass boilers and £6,000 for a ground-source heat pump.

If you have considered air-source or ground-source heat pumps and subsequently ruled them out, there are other fuel types that you could consider to replace old fossil fuel off-grid systems. Each of these has its pros and cons.

Biomass

A biomass boiler works by burning wood pellets, chips or logs to power central heating and hot water boilers. They tend to be larger than fossil fuel equivalents, but can be more suitable for larger properties that may be difficult to insulate and don’t suit a heat pump system. A biomass boiler is one of the cheaper heat options and can score quite highly on an EPC rating. You may also be able to receive up to £5,000 for a biomass boiler through the Boiler Upgrade Scheme if your property isn’t suitable for a heat pump.

Infra-red radiators

These can be suited to older buildings that are unsuitable for wall insulation, as the insulation is of no benefit to the operation of the system. However, they require an electrical connection, and there needs to be consideration about how this might impact fuel bills during a time of increasing electricity prices.

However, because EPCs are not set to adjust to any cost-of-living crisis, infra-red radiators do score relatively well. There is no funding available for these systems, but they can be relatively low cost to install.

High heat retention storage heaters (HHRSHs)

While the cost of electricity is high, a system that uses electricity at night when it is slightly cheaper, stores it and then releases it during the day could be a good option. These systems do require a dual electric meter to take advantage of variations in electric pricing for day and night.

Modern systems of this type are well insulated and more effective than older counterparts. As with all direct electric heating types, including electric radiators, HHRSHs are not considered low carbon because the electricity grid still relies on fossil

fuels. However, the grid is gradually decarbonising, so direct electric heating may be rated more highly in the future. In the meantime, electric heat pumps, which can be more efficient, are the government’s preferred alternative heat type.

Liquid petroleum gas (LPG)

LPG is a hydrocarbon gas in liquefied form. An LPG boiler works in a similar way to an oil or gas boiler - the fuel is burned to produce the energy needed to heat water from the mains supply. As such, LPG is an option for most off-gas grid homes and requires an LPG tank to be kept in the garden, above or below ground. While an LPG boiler is one of the cheapest types to install, the cost of the liquid gas itself can be high, so LPG systems score relatively badly on an EPC. There is currently no funding available for LPG systems.

If you plan to change your heating system to one of the options mentioned or to something else, you may want to consider whether you can hold off and do this from April 2023. In 2021 the government consulted on raising the minimum EPC standard for privately rented homes to EPC ‘C’ for existing tenancies by 2028 and for new tenancies by 2025. To achieve this, it was proposed that landlords would be required to spend up to £10,000, whereas currently the required spend is £3,500 to meet EPC ‘E’. However, only works listed on an EPC and installed from 1 April 2023 would count towards the new higher cost cap. Therefore, unless you are replacing a broken-down fossil fuel system or fully refurbishing an empty property, you may want to install other, lower-cost measures first, as these can be effective in keeping fuel usage low during a time of cost uncertainty.

For local installers for any of the new technologies listed, you may want to consult your CLA Business Directory under 'Renewable Energy'

Key contact:

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Avril Roberts Property and Business Policy Adviser