5 Key Actions for the UK’s Zero-Carbon Building Transition

Hello, Champions of Net Zero!

As we navigate the path towards a sustainable future, one critical solution stands out in the quest to decarbonise the UK’s building stock: heat pumps. These innovative devices are at the forefront of our energy transformation, boasting remarkable efficiency by requiring 3-4 times less energy than traditional gas boilers and electric resistive heating systems. Not only do they provide clean heat and comfort to households, but they also hold the potential to significantly lower energy bills for consumers.

Despite the clear benefits, the deployment of heat pumps in the UK has lagged behind our European counterparts. However, there are promising signs that this trend may be shifting. In March, a record-breaking 4,000 applications were submitted for the government’s grant programme, which offers £7,500 towards the purchase and installation of heat pumps. This surge in interest can be attributed to a relaxation of previous requirements for cavity wall and loft insulation, as well as a change in planning policy that allows installations to occur within one metre of a neighbouring property. These developments are encouraging, particularly as the Energy Transitions Commission’s report, “Achieving Zero-Carbon Buildings,” debunks the myth that deep insulation is a prerequisite for heat pumps to provide the same level of comfort as gas boilers.

Nevertheless, we are still far from achieving our goals. Buildings are responsible for a staggering 40% of the UK’s carbon emissions. To align with the government’s target of reducing emissions by at least 68% by 2030, compared to 1990 levels, we need to reach an ambitious target of 600,000 heat pump installations annually by 2028—a tenfold increase from current figures.

This goal is not unattainable, but with less than three years remaining, we must act swiftly and decisively. There are five essential priorities that must be addressed to facilitate this transition.

First and foremost, the government must establish investment certainty. The Future Homes Standard, which sets regulations for “zero-carbon ready” new buildings, was originally slated to be implemented in 2025, yet we are still awaiting its announcement. To catalyse the heat pump market, it is imperative that the government introduces an immediate ban on gas boilers in new homes, and subsequently prohibits their sale in existing buildings by 2035. Such measures are essential for driving down upfront costs while simultaneously fostering the development of local supply chains and skills.

Secondly, there is an urgent need to rebalance gas and electricity prices to actively encourage the electrification of heat. Currently, a kilowatt-hour of electricity costs four times more than the same amount of gas in the UK, effectively negating the efficiency benefits that heat pumps offer on energy bills. In contrast, countries like Norway and Finland have near parity in gas and electricity costs, resulting in 50-60 heat pumps being installed for every 1,000 households each year—compared to fewer than five in the UK.

A dual approach is necessary here. The government must eliminate the levies that disproportionately burden electricity, with revenues from carbon pricing being used to offset this. Alternatively, these levies could be gradually transferred to gas, utilising the revenue to finance heat pumps for lower-income households. This strategy must be supported by a well-structured power market that accurately reflects the share of low-cost renewable energy generated within the UK’s grid.

Thirdly, it is crucial for the government to extend its funding for heat pump and energy efficiency grants beyond the year 2026. In the medium term, subsidies should focus on supporting lower-income households, while other households could benefit from low-cost financing options at zero interest rates. Banks, too, have a pivotal role to play by offering mortgage top-ups at favourable rates, as emerging evidence suggests that heat pumps and energy efficiency enhancements can increase property values.

Fourth, a cohesive and locally led strategy is imperative. This should involve collaboration between local government, energy providers, network companies, and businesses. Implementing street-by-street decarbonisation strategies will help coordinate upgrades to local distribution networks, invest in community skills, and serve as a streamlined resource for installation processes. A crucial aspect of this approach is to identify opportunities for deploying networked ground-source heat pumps, which are 4-5 times more efficient than gas boilers and can cater to entire blocks of flats or streets. These systems can be financed by the private sector, with costs recouped through a standing charge, thereby reducing the initial financial burden for households.

Finally, one of the most significant hurdles we face is incentivising landlords to opt for heat pumps over resistive heating systems. While heat pumps may incur installation costs that are 4-5 times higher, they ultimately provide households with savings of 3-4 times on running costs. This transition is crucial for the stability of our electricity grids and for supporting lower-income households. The government should implement its proposals to ensure that rental properties achieve a minimum Energy Performance Certificate rating of C by 2030, coupled with low-cost financing options that can be repaid directly through rental income.

It is entirely achievable to sever the UK’s buildings from the gas grid by 2045 at the latest, all while reducing energy bills and enhancing living standards. However, the journey to zero-carbon buildings will not be straightforward; millions of households must be motivated to undertake changes that often come with substantial upfront costs. This transformation demands strong national ambition, a clear role for the private sector, and unwavering policy commitment.

For more insights on how we can achieve these ambitious targets and transform our building stock, visit Energy Transitions Commission.

This article originally appeared in the June 2025 issue of Energy Manager magazine. To stay informed on the latest developments in the energy sector, consider subscribing today.