Decarbonisation of rural homes at risk due to high costs

The government must increase funding in order to enable the decarbonisation of rural homes, according to research conducted by OFTEC. 

Current plans to decarbonise rural homes including replacing fossil fuel heating with electric heat pumps, solid biomass or in some cases hybrid systems.

However, according to OFTEC, there is a lot of uncertainty over how this transition will be funded. In a survey of over 1,000 rural property owners, in a survey of over 1,000 rural property owners more than three quarters (78%) said they would be unlikely to install a heat pump in the future, even with the current financial incentives available.

For the many people who live in poorly insulated rural properties, this could be in addition to the cost of making energy efficiency improvements to their homes which are needed for effective heat pump use.

According to the Department for Business, Energy and Industrial Strategy, 65% of oil heated homes currently fall into the lowest energy efficiency bands, with the cost to upgrade estimated to be on average £12,300.

The new research underlines the barriers to decarbonisation, with more than two thirds (68%) of rural homeowners stating that £2,500 was the maximum amount they would be willing to spend on energy efficiency upgrades, with over a third (35%) of those unwilling to spend anything.

Malcolm Farrow, head of Public Affairs at OFTEC who commissioned the survey, said: ‘The research found over half (55%) of rural homeowners would not be prepared to pay more than £2,500 for a new low carbon heating system, and a third of those wouldn’t be willing to pay anything at all.

‘This is important because the average price to install an air source heat pump is £10,900. The expense could be reduced by £5,000 if homeowners take up a Green Homes Grant, but this still leaves a minimum shortfall of almost £6,000 which, according to the study results, most rural households would be unwilling or unable to pay.”

‘On this basis, it’s hard to see how the seismic shift to electric heating promoted by the government can be realised in rural areas without a major injection of extra funding to help homeowners make the transition. It also raises the question of why other, more cost-effective low carbon heating solutions are not being supported.’

‘Any support is, of course, welcome, but our fear is that funding will far short of the amount needed which could reach almost £20 billion. Households deemed able to pay would benefit from greater choice and urgently need access to more cost-effective low carbon heating options, otherwise, progress on emissions reduction will remain painfully slow.

‘In the wake of Covid-19 which has hit the finances of many households hard, affordability is likely to become even more crucial. So, it’s imperative that renewable liquid fuels are considered as part of decarbonisation policy for rural homes.’

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