Green alternatives to gas boilers will cost £11.8 billion more than the Government has budgeted for over the next four years because ministers have vastly underestimated the scale of home retrofits, The Telegraph can reveal.
Homeowners and landlords also face paying £17.8 billion in the next four years to go green, according to analysis from leading energy groups and think tanks.
The Government has committed to replacing oil and gas boilers at the rate of 600,000 a year by 2028 to help reach its net zero commitment. But campaigners say this will need to rise to 900,000.
However, the Government has underestimated how many homeowners can pay thousands of pounds to retrofit and install heat pumps, according to analysis from the Energy Efficiency Infrastructure Group (EEIG), which includes utility provider EON and the Confederation of British Industry.
The technology, which is similar to a refrigerator in reverse and runs on electricity, heats radiators to a lower temperature and often requires insulation, bigger radiators and underfloor heating to keep older homes warm.
How heat pumps work
How Heat Pump Works
The scale of the challenge to install them is immense. Energy efficiency retrofits, which the Government says it wants to achieve in around 17 million homes by 2035, are expected to cost £4,400 per house.
A heat pump ranges from £7,000 to £15,000, though manufacturers say they will be able to halve costs within 18 months. But a third of homeowners have no savings, according to the most recent English Housing Survey.
"UK homes perform shamefully when it comes to energy efficiency – and we simply have no more time to waste in making improvements," said Alan Jones, the president of the Royal Institute of British Architects, a member of the EEIG.
The EEIG wants the full costs of installations in low-income households to be paid for, and grants of up to £6,000 for others.
Overall, the EEIG said, greening home heating would require £17.8 billion in public money, some £6 billion of which had already been committed by the Government.
Heat pump challenges | Three-bed semi-detached
MPs and industry figures say a huge education campaign will be necessary to explain to British people how heat pumps work, and why gas boilers are a problem.
Heating our homes accounts for around 14 per cent of the UK’s greenhouse gas emissions, one of the biggest single sources. The vast majority of that comes from gas boilers in the 85 per cent of homes that use them.
But 85 per cent of British people do not think their boiler is a major contributor to the UK’s emissions.
Heat pumps are common in Europe, particularly in Nordic countries, belying the idea that they cannot be used in colder climates. They are also currently "the only viable low carbon heating source", according to Philip Dunne MP, the Conservative chairman of the Environmental Audit Committee.
But heat pumps are an unfamiliar technology and can be tricky to get right, particularly in the UK’s older, less well insulated homes, which often require a bespoke system.
Heat pump challenges | Off-grid rural home
And there is a huge lack of trained installers in the UK – only 1,200 compared to the 10,000 that will be needed by 2025, according to research by EY.
Air-source heat pumps work by using a fan to pull ambient heat out of the air, which is converted via a compressor to hotter temperatures, used to heat radiators and a hot water cylinder for taps and showers.
Ground source heat pumps work in a similar way, but draw their heat from pipes buried in the ground either horizontally, or vertically at around 90m to 160m deep.
For maximum efficiency, heat pumps are designed to heat water to lower temperatures than a gas boiler by around 10 degrees. That is plenty for a hot bath or shower, but can require bigger radiators, underfloor heating and insulation to ensure a typical home stays warm.
The technology can also take more than two hours to heat water and is designed to heat up gently to a lower temperature, requiring planning ahead for showers and times when you will be home.
Heat pump challenges | Block of flats
"We need to level with consumers," said Mr Dunne. "But instant heating of our homes to similar degrees as the tropics isn’t the answer at all.
"We need to reduce excessive energy consumption to reduce the impact on our environment."
John Szymik, chief executive of Octopus Energy Services, which is investing millions in heat pump technology and training, said: "People have come to expect everything should be instantaneous, which is a false reality that is a product of artificially low gas prices."
The Government’s long-awaited "heat and buildings strategy" on how to decarbonise has stalled amid disagreement over how best to incentivise people to make the switch.
The Government has recognised it must make electricity relatively cheaper than gas, with green taxes currently leaving heat pump households paying around £400 a year more in their energy bills than those with gas.
Boiler – Average UK home carbon emissions by source
But there is concern that raising gas prices would leave some consumers struggling to cope, while heat pump and retrofit prices make it impossible for many to move away from gas boilers.
Getting all homes to EPC C would reduce household bills by £400 a year on average, the EEIG says, as well as supporting estimated 190,000 jobs, putting £2 put back in economy for every £1 spent, and preventing 10,000 excess winter deaths annually.
Michael Lewis, chief executive of E.ON UK, said there was "no route to the UK tackling climate change and reducing emissions without changing how we heat our buildings".
He added: "There is also an economic win here: by reducing our dependence on gas, which is increasingly sourced from overseas, we’ll be keeping more than £150 billion within the UK economy by 2050 rather than paying it to other countries to import their gas supplies."
‘I had to light the wood burning stove to stop myself turning into an icicle’
Judith, a retired lecturer, moved into a 1930s semi-detached, three-bedroom house with a heat pump in North Oxford three years ago.
But she was forced to remove the air-source heat pump and reinstall a gas boiler when she found the system failed to heat the house.
"The first winter wasn’t too bad. But the house was not as warm as I had been led to believe it would be," she said. "But by the third winter it was impossible to keep the house warm and it was miserable.
"I had to light the wood burning stove to keep myself from being a little old lady that turned into an icicle."
No work had been done to improve the insulation of the house, meaning heat easily escaped, and there had been no underfloor heating or larger radiators installed.
Boiler – Estimated UK emissions attributed to heating (2016)
A faulty control panel also meant the heat pump failed to come on at the required times.
John Szymik, chief executive of Octopus Energy, said there was a risk of ill-suited installations while heat pumps were still a "cottage industry".
"There isn’t really much standardisation of design yet," he said. "If the system is incorrectly sized, then the property won’t be as warm."
Meanwhile, electricity prices meant the heat pump was "incredibly expensive to run", Judith said.
"My heating bill was about £1600 a year, in a very small three bedroom house. It’s gone down now to about £600 or £700 max for both gas and electricity."
As someone who considers herself eco-minded, Judith felt "deeply ashamed" to reinstall the gas boiler earlier this year.
"The man who installed the heat pump said he told the owners it was not the right house to put it in, but they went ahead anyway," Judith said. "They were very green but didn’t think things through properly.”