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Market-based Low Carbon Heating Systems: Consultation


On 10th January 2023, the Government announced an update on the outcome of their consultation on a market-based mechanism for low carbon heat.

The consultation set out to gather a response to the Government’s proposal aiming to support an ‘industry-led transformation of the heating appliance market towards low carbon products’. This, in turn, would encourage the public in the direction of electric heating system installation and Heat Pumps, as well as promote the phasing out of fossil fuel heating systems.

The intent of this structure is to create the incentive to increase heat pump installations in existing properties each year, providing a clearer path towards the net zero targets by 2050.

In the consultation, the focus was split into 4 features:

  • The proposed scope of technologies and installations.
  • The choice of the core target for the scheme.
  • Opportunity and options for trading within this scheme.
  • Options for scheme administration, penalties and enforcement.

From the positive response from multiple sources, including the public, industry professionals, academics, and trade bodies, the Government intends to proceed with developing plans to introduce a market-based mechanism for low carbon heat and bring forward legislation in the Energy Security Bill. This plan will provide the public with more affordable options to switch over to a heat pump system, reducing the reliance on fossil fuels for heating.

Other heating technologies have an important supporting role for the net zero targets. However, this scheme is primarily targeting Heat Pump installations.

This structure only forms part of the proposal, and further research is needed before this policy is completed and ready to be presented in full detail.

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Elmhurst Energy Response:

Elmhurst Energy welcomes this consultation outcome and the proposed plans to introduce a market-based mechanism for low carbon heat.

The increase in heat pump installations across the UK remains a vital step on the road to net zero and in reducing the nation’s reliance on fossil fuels. The focus on consumer awareness and accessibility to low carbon products is particularly welcomed at a time when more people are in fuel poverty than ever before.

However, the success of the proposed market-based mechanism for low carbon heat depends on various factors, including other supporting policies as well as the needed consumer protections for the installation and maintenance of the systems. These areas must be examined in addition to the roll-out of more low carbon heat products for the proposals to bring about positive action.

Elmhurst Energy awaits the release of the policy and the full details of the consultation and further research.

To read the full response from the consultation, please visit the following link: Market-based mechanism for low carbon heat – GOV.UK (www.gov.uk)