Scotland Heat Pump Installation Rate Is Too Slow

The rate of heat pump installations in Scotland is happening too slowly for the government to hit its targets, according to a new report by Audit Scotland.

The Scottish government is aiming to phase out fossil fuel heating systems, such as gas boilers, by 2045, as laid out in their 2021 Heat in Buildings Strategy (HIBS).

Over 2 million households in Scotland are still heated by gas boilers, and to date, only around 260,000 homes have an electric heating system, whether that be a type of heat pump or an electric boiler.

Annual installations of low-carbon heating methods would need to reach 200,000 by the end of the decade in order for the government to meet its target, but according to the latest MCS data, only a little over 6,000 domestic heat pump installations were carried out in Scotland in 2023.

The rate of annual heat pump installations, along with other low-carbon heating forms, would need to increase by a little under 400% by the end of the decade, for the Scottish government to stay on course.

The Scottish government has pledged £1.8 billion in to help decarbonise heating in homes, but it estimates that over £33 billion in public and private sector funding, including from households, will be needed.

Audit Scotland has recommended several actions that would help increase heat pump installations to the Scottish government.

These include producing a delivery plan for HIBS by the end of 2024 that has clear targets, budgets, and a timescale, as well as working with the private sector to create funding and finance schemes for homeowners.

Row of houses at Parton village in Dumfries and Galloway, Scotland

The role of government funding in increasing heat pump installations

Government funding, in the form of grant and loan schemes is crucial to increasing the heat pump installation rate in Scotland.

There are currently two heat pump grants available in Scotland, Warmer Homes Scotland and the ECO4 Scheme, both focused on helping fuel-poor households. According to Audit Scotland, both schemes have helped approximately 40,000 households upgrade their heating systems.

In addition to grants, there is also the Home Energy Scotland Loan, which offers interest free-loans for heat pump installations to Scottish residents. This has so far helped 8,591 households install gas boiler alternatives.

While these schemes have helped rates of installation, middle-income households who often don’t qualify for grants could still struggle to pay for a heat pump.

Heat pumps cost around £10,000 to buy and install, and also often require additional home improvements, such as insulation and radiator replacements. All this can drive up the total cost, and might explain why heat pump uptake is still relatively low in Scotland.

However, despite the low rate of installations across Scotland, some areas are seeing a high level of take up, potentially due to the number of households in fuel poverty.

The Orkney Islands and Argyll and Bute have the highest percentages of heat pump installations in the UK, not just Scotland, according to MCS data.

As well as being in fuel-poverty, these areas also have a higher than average percentage of homes off the gas grid. As a result, a higher than average amount of households in these areas would have been eligible for one of the government heat pump grants, which in turn could explain the high rate of installations.

Looking at these numbers, it’s clear that government grants are a key tool for increasing the rate of heat pump installations, and more need to be made available to a wider variety of households in Scotland if the government wants to meet its targets.

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