Low income homes pay five times more than higher income homes, according to new report from ADE: Demand.
The report looked at the two most common heat-based energy equipment pieces for houses – heat pumps and heat batteries. However, only heat batteries are typically suitable for flats or terraced houses.
ADE said heat pumps in a smaller home cost £9.3k to install, or a heat battery costs upwards of £10k. After government grants, a household pays £1.8k for a heat pump, or £7.7k for a heat battery.
For a family in the second-lowest income bracket, being expected to pay £7,700 would swallow nearly 45% of their annual income after housing costs. For the same household, the heat pump contribution would represent just over 10% of their income.
Renters are exposed to the policies even more brutally – almost two-thirds of social renters alongside 60% of private renters live in these homes, yet they have little say over which technology is installed and used.
Heat batteries store electricity as heat, work with existing radiators, need no outside unit and can charge when power is cheaper but policies favour heat pumps, without consideration of the situational best choice.
ADE: Demand is calling on Ministers to equalise the grant for heat batteries at £7,500, extend the same VAT relief given to heat pumps and properly model the cost of decarbonising flats and leasehold homes.
“It cannot be right that households already struggling to make ends meet are asked to pay five times more for clean heat because their home is less suited to the technology that gets the most Government support. Technical feasibility is only the first step; public policy must support households to install the heating solution that fits their home.” said Sarah Honan, Head of ADE: Demand.
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