Heat Pumps, Heat Networks and the Warm Homes Plan

Current Heat Transition Position

The heat sector entered 2026 with three load bearing changes inside a single month. On 27 January 2026 the Heat Networks (Market Framework) (Great Britain) (Amendment) Regulations 2026, made as SI 2026/7, brought Ofgem in as the statutory regulator of heat networks across Great Britain. About four hundred and ninety thousand homes are already served by district heat schemes, and they sit, for the first time, inside an authorisation regime modelled on the gas and electricity supply licences. Heat suppliers now operate under deemed authorisations and migrate to full authorisations through 2027; price transparency, supplier of last resort, and Energy Ombudsman access become licence conditions rather than voluntary scheme rules.² The Heat Trust voluntary code that ran the consumer protection layer for the previous decade is folding into the Ofgem licensing framework on a phased schedule through 2027.

The Boiler Upgrade Scheme passed two hundred and fifty thousand cumulative installations during 2024 and is now well clear of three hundred thousand. The grant has held at seven thousand five hundred pounds for an air source heat pump or a ground source heat pump since 23 October 2023, with biomass at five thousand pounds and air to air heat pumps added at two thousand five hundred pounds from 28 April 2026; from 21 July 2026 a heat pump that replaces oil or LPG in an off-gas-grid property draws a higher nine thousand pound grant. Ofgem administers the voucher end to end through Microgeneration Certification Scheme registered installers; the householder never sees the cash, and the discount is netted at point of sale.¹ Installations in 2024 reached about sixty thousand and the trajectory through 2025 is on the order of seventy five thousand. The Climate Change Committee Seventh Carbon Budget, published in February 2025, sets the required installation rate at four hundred and fifty thousand per year by 2030 and one and a half million per year by 2035, so the gap between today's run rate and the target is the binding constraint on the whole transition.

The Warm Homes Plan announced in the 30 October 2024 Autumn Budget put approximately fifteen billion pounds on the table across the Parliament, of which three point four billion is allocated to 2025 to 2026 through 2027 to 2028, and the first delivery year is running. The plan funds the Boiler Upgrade Scheme alongside fabric retrofits (loft insulation, cavity wall, solid wall, double glazing) for low income households, social housing decarbonisation through registered providers, and local authority delivery for area based schemes. The headline target is five million homes upgraded across the Parliament, with the dominant intervention being fabric measures rather than appliance swap.¹ The Clean Heat Market Mechanism, live since 1 April 2025 under SI 2025/81, places a parallel obligation on boiler manufacturers to sell heat pumps at a rising share of fossil boiler sales (six percent in scheme year one, eight percent in scheme year two starting April 2026), with a payment in lieu of five hundred pounds per missing credit.³

The heat domain has a settled regulator (Ofgem, statutory from 27 January 2026), a settled consumer grant (Boiler Upgrade Scheme at seven thousand five hundred pounds), a settled fiscal envelope (fifteen billion pounds across the Parliament), and a measurable installation gap against the trajectory. The questions are no longer about whether the architecture exists. They are about whether the supply chain, the installer base, and the building stock can move from today's seventy thousand installations per year to the four hundred and fifty thousand the Climate Change Committee pathway needs by 2030, and whether the heat network pipeline can scale at the same time inside the new Ofgem framework.

The quarter of UK emissions that comes from heating buildings

Heating buildings accounts for roughly twenty five percent of all United Kingdom greenhouse gas emissions, when transmission and distribution losses for the fuel are included. The split inside that quarter is approximately seventeen percent from domestic heat (about twenty eight million households, of which roughly twenty three million heat with a gas boiler), six percent from non domestic heat (commercial offices, schools, hospitals, retail), and the remaining two percent from process heat in the buildings sector. The 2008 Climate Change Act binds the country to a net zero target by 2050, and the legally binding fifth carbon budget already requires a thirty seven percent cut on 1990 levels in the 2028 to 2032 budget period. The Climate Change Committee Seventh Carbon Budget (February 2025) sets the buildings sector budget for 2038 to 2042 at the level that requires the heat transition to be on a trajectory toward almost full decarbonisation by 2050.

The structural reasons heating decarbonises slowly are well documented. The stock turnover rate for a gas boiler is about fifteen years, which means about ninety thousand boilers fail and need to be replaced in any given month across the United Kingdom, and the default replacement is a like for like fossil unit unless the householder makes a positive choice to switch. The cost of an air source heat pump installation runs between ten thousand and thirteen thousand pounds before grant, against three thousand to five thousand pounds for a replacement gas boiler. The retrofit complexity is non trivial; heat pumps run at lower flow temperatures than condensing gas boilers, which often requires larger radiators or underfloor heating, and the seasonal coefficient of performance falls sharply on cold days unless the building fabric is reasonable to start with.

The policy package has the Boiler Upgrade Scheme, the Clean Heat Market Mechanism, the Future Homes Standard 2025 (which prohibits new fossil fuel heating in new homes in England), and the Warm Homes Plan working in parallel. The intent is to lift the installation rate by a factor of about six over the five years between 2025 and 2030, which is the rate the Seventh Carbon Budget identifies as on track for the 2050 destination. The Boiler Upgrade Scheme and the Warm Homes Plan are the demand pull (consumer money); the Clean Heat Market Mechanism is the supply push (manufacturer obligation); the Future Homes Standard is the new build cut off. The three together aim to make the fossil boiler the choice that requires a positive defence by the householder, the installer and the manufacturer, rather than the default.¹

Heat pumps: how the coefficient of performance moves with outdoor temperature

A heat pump is a refrigeration cycle running in reverse. A refrigerant at low pressure absorbs heat from an outdoor heat source (the air, the ground, or a body of water), passes through a compressor that raises its temperature and pressure, gives up the heat through a condenser to the indoor heating circuit, and expands back to the low pressure starting state. The useful output is the heat delivered to the indoor circuit; the input is the electricity that runs the compressor. The instantaneous ratio of the two is the coefficient of performance, written COP. A typical air source unit running at a plus seven degrees Celsius outdoor air temperature and a thirty five degrees Celsius flow temperature delivers a COP of about four; the same unit at a minus seven degrees Celsius outdoor temperature and a forty five degrees Celsius flow temperature delivers a COP closer to two and a half.

The single number that matters in practice is the seasonal coefficient of performance, written SCOP, which weights the operating points across a typical heating season. The MCS standards body publishes the SCOP for every certified appliance under BS EN 14825 conditions for the average European climate (which is broadly representative of Great Britain). A typical air source heat pump installed under the Boiler Upgrade Scheme delivers a SCOP of 2.8 to 3.2 in the field, against a manufacturer nameplate that might say 4.5 or higher at a single test point. A typical ground source heat pump delivers 3.5 to 4.2 in the field, because the ground temperature is steadier than the air across the heating season and the source side temperature lift is smaller.

Why the SCOP is the working number, not the nameplate COP

A boiler is rated at a single steady state condition because the combustion happens at a constant flame temperature regardless of the outdoor weather. A heat pump is rated at multiple points because the COP rises and falls with the outdoor source temperature. The MCS Heat Pump Standard MIS 3005-D requires the designer to compute the seasonal performance for the specific dwelling using BS EN 12831 heat loss and a weather compensation curve that adjusts the flow temperature against outdoor temperature. The grant under the Boiler Upgrade Scheme is contingent on the design pack landing inside the MIS 3005-D envelope, and on the installer being MCS registered to install heat pumps under MIS 3005-I.

The field SCOP is sensitive to four things in roughly this order. The flow temperature: a system designed for thirty five degrees Celsius into oversized radiators gives a SCOP a full point higher than the same system at fifty five degrees Celsius into the original gas boiler radiators. The building fabric: an EPC band A or B dwelling needs less heat per square metre than an EPC band D or E dwelling, so the heat pump runs less and tracks closer to its rated operating point. The control regime: a weather compensated system that ramps slowly across the day spends most of its time near the design point; an on off thermostat that calls for maximum output for thirty minutes at a time spends most of its time at the compressor's worst operating point. The hot water store: a heat pump cannot reach the same flow temperature as a gas boiler, so the dwelling needs a stored hot water cylinder rather than a combi boiler, and that cylinder needs to be large enough for the household.

Refrigerant choice and the move to R290 propane

Older heat pumps used R410a or R32 as the refrigerant. Both have a non trivial global warming potential (R410a is about two thousand and eighty eight times more potent than carbon dioxide; R32 is about six hundred and seventy five) so an accidental release from a leaking system carries an embodied emissions cost on top of the operational savings. The 2024 to 2026 transition has been to R290 propane, which has a global warming potential of three, and which is now standard on most new air source installations. The trade off is flammability; R290 is an A3 refrigerant under the ASHRAE classification, so installation requires the appliance to sit outdoors and the refrigerant circuit to remain charge limited per the EN 378 standards. The trade off has been broadly judged worth taking; R290 also gives a slightly better COP at high flow temperatures, which matters for the retrofit market where the existing emitter sizing is fixed.

Air source and ground source heat pumps, and the EPC band that decides suitability

The two dominant heat pump types in Great Britain are the air source and the ground source. The air source unit extracts heat from the outdoor air through a fan coil that sits in a cabinet on the outside of the property; the ground source unit extracts heat from the soil through either a horizontal trench laid below the frost line or a set of vertical boreholes drilled to between eighty and one hundred and fifty metres. The air source unit costs between ten thousand and thirteen thousand pounds installed before the Boiler Upgrade Scheme grant; the ground source unit costs between twenty thousand and thirty thousand pounds installed. Both are eligible for the seven thousand five hundred pound grant, so the net cost difference to the householder is the same as the gross cost difference.

The choice between the two is rarely close in practice. About ninety five percent of Boiler Upgrade Scheme installations to date have been air source units, because the air source unit can be retrofitted to most dwellings with outdoor cabinet space, whereas the ground source unit requires either a garden large enough for a horizontal trench (about four times the floor area of the dwelling, in clay soil) or the capital and access for borehole drilling. The ground source unit delivers a higher seasonal coefficient of performance (3.5 to 4.2 in field measurement against 2.8 to 3.2 for air source) because the ground temperature is steadier than the air temperature across the heating season, so the saving on running cost is real, but the capital cost differential takes around fifteen to twenty years to recover at current electricity prices.

The Energy Performance Certificate band as the planning gate

The Energy Performance Certificate, written EPC, is the building energy rating system that runs from band A (most efficient) to band G (least efficient) on a thirty year old methodology that scores a dwelling against a model of running costs at standard occupancy. The certificate is a planning gate for the heat pump choice in two senses. First, an EPC band C or better dwelling can typically run an air source heat pump on the existing radiators at a flow temperature of forty five to fifty degrees Celsius and reach the SCOP band the field data shows. An EPC band D or E dwelling will deliver a SCOP closer to two and a half on the existing radiators, which is still substantially lower carbon than the gas boiler it replaces but raises the running cost noticeably. An EPC band F or G dwelling typically needs fabric upgrades (loft, cavity wall, glazing) before the heat pump installation makes economic sense at any flow temperature.

Second, the private rented sector is now moving toward a statutory EPC band C floor. The Minimum Energy Efficiency Standard (MEES) regulations required EPC band E for all private rented tenancies from April 2018; the DESNZ consultation published in 2025 proposes EPC band C for new private rented tenancies from 2028 and for all private rented tenancies from 2030, with a cost cap in the range of ten thousand to fifteen thousand pounds per dwelling. The consultation is now closed and the response is expected during 2026. Social housing has a parallel pathway running to EPC band C by 2030 under the Social Housing Decarbonisation Fund (which is folding into the Warm Homes Plan envelope). Owner occupier homes carry no statutory EPC obligation, but lenders and mortgage products are increasingly using the EPC band as a risk metric, and the United Kingdom Insurance Association has signalled that the household insurance market will follow suit by 2030.¹

Hybrid and water source heat pumps for the harder cases

Two minor categories sit alongside the air source and ground source units. The hybrid heat pump combines an air source heat pump with a small gas boiler that runs only on the coldest days when the heat pump cannot meet the building's peak demand on its own. The hybrid unit has the lowest installation cost (about eight thousand to twelve thousand pounds) and delivers a moderate effective SCOP of 2.4 to 2.8 across the heating season, but the residual gas demand removes one of the main reasons to install a heat pump in the first place. The hybrid unit was added to the Boiler Upgrade Scheme eligibility at five thousand pounds, then withdrawn from new applications in 2024 on the grounds that the carbon savings did not justify the grant. The water source heat pump extracts heat from a river, a lake, an open loop well, or the sea, and is a niche choice with very high SCOP (3.6 to 4.5) on the rare sites where the heat source is accessible. The Boiler Upgrade Scheme has no separate water source category; in practice a water loop is supported under the ground source heat pump grant at seven thousand five hundred pounds.

Heat networks and the Ofgem regulator that went live on 27 January 2026

A heat network is a centralised heat generation plant (the energy centre) connected by an insulated pipework system (the primary loop) to a set of buildings, each of which receives heat through a heat interface unit (the secondary loop) that takes hot water from the primary loop, drops it across a heat exchanger, and feeds the building's own central heating circuit. The primary loop typically runs at seventy to ninety degrees Celsius on older fourth generation networks, and at sixty to seventy degrees Celsius on newer fifth generation networks designed for large heat pump sources. About fourteen thousand heat networks in Great Britain serve approximately four hundred and ninety thousand dwellings, plus about two thousand five hundred non domestic buildings, for a total of roughly two percent of national heat demand. The schemes concentrate in city centres where the heat load density makes the pipework economic.

The Heat Networks Market Framework: SI 2025/269 and SI 2026/7

The statutory regulation of heat networks across Great Britain begins on 27 January 2026 under the Heat Networks (Market Framework) (Great Britain) (Amendment) Regulations 2026, SI 2026/7, which commenced the operational provisions of the parent Heat Networks (Market Framework) (Great Britain) Regulations 2025, SI 2025/269. The regime is modelled on the gas and electricity supply licensing framework. Ofgem holds the statutory regulator role; heat suppliers and heat distributors must hold an authorisation, which carries conditions on price transparency, technical standards, complaint handling through the Energy Ombudsman, supplier of last resort cover, and the consumer protection rules that were previously voluntary under the Heat Trust code.²

The transition runs in phases through 2027. On 27 January 2026 every existing heat supplier was granted a deemed authorisation, which lets them keep operating while they prepare full authorisation applications. The full authorisation regime, with the operational conditions on metering, billing, customer service standards and tariff publication, phases in across 2026 and 2027. The Heat Trust voluntary scheme (about sixty member suppliers covering roughly half of the regulated dwellings) is folding into the licensing framework, with the Heat Trust technical and customer service standards being adopted as Ofgem licence conditions on the phased schedule.

Why the regulation matters for the decarbonisation case

The heat network share of GB domestic heat is two to three percent today. The Climate Change Committee pathway to 2050 has the share at around twenty percent by 2050, concentrated in the dense urban centres where individual heat pumps are constrained by space, planning, or building age. The regulation matters because the historic barrier to heat network growth was not the engineering economics; it was the consumer protection uncertainty. A household connecting to a heat network was, before 27 January 2026, accepting a long term commercial relationship with a heat supplier under contract terms that had no Ofgem regulator standing behind them. The HNMF brings the heat supplier under the same authorisation regime as a gas supplier, which removes the consumer protection asymmetry and makes the heat network connection a regulated equivalent of the gas connection it replaces.

The decarbonisation case for the heat network is on the heat source side, not on the connection side. Roughly seventy percent of installed heat network capacity in Great Britain today runs on gas combined heat and power (CHP), where a gas turbine generates electricity for the grid and recovers the exhaust heat for the network. A gas CHP network has a carbon intensity broadly comparable to a domestic gas boiler when allocated by useful heat output, so the network on its own is not low carbon. The decarbonisation pathway is to swap the heat source from gas CHP to a large heat pump (which uses the network as a sink for low grade waste heat from rivers, sewers, mine workings, the London Underground, data centres, or industrial process), to Energy from Waste with heat recovery, or to geothermal at the rare sites where it is available. The HNMF authorisation regime can require an existing network to publish a decarbonisation pathway as a condition of its authorisation, which is the mechanism by which the seventy percent gas CHP share is expected to fall toward zero across the 2030s.

The CIBSE CP1 design code and the Heat Network Technical Assurance Scheme

The engineering quality bar for a heat network in Great Britain is set by the CIBSE Code of Practice CP1 (2020 edition), which runs the five stage lifecycle from feasibility through design, construction, commissioning, and operation, with explicit performance gates at each stage. The Heat Network Technical Assurance Scheme, run by DESNZ, provides an independent technical sign off against CP1, and is now a precondition for Heat Network Zoning designations (the areas where centralised heat is the lowest cost decarbonisation route and where large buildings inside the zone become obligated to connect). The first wave of Heat Network Zoning designations in England began in 2025 under Part 8 of the Energy Act 2023, with the local authority Zone Coordinators running the local process under a DESNZ methodology.

The Boiler Upgrade Scheme grant per heat pump installation

The Boiler Upgrade Scheme, abbreviated BUS, is the consumer facing grant that drives heat pump uptake outside the new build sector. Ofgem administers the scheme under powers transferred from the Department for Energy Security and Net Zero (DESNZ); the scheme launched on 23 May 2022 at five thousand pounds per air source unit and six thousand pounds per ground source unit, and was uplifted to seven thousand five hundred pounds per unit (air source or ground source) on 23 October 2023, biomass held at five thousand pounds, and air to air heat pumps added at two thousand five hundred pounds from 28 April 2026, with a higher nine thousand pound tier for a heat pump replacing oil or LPG off the gas grid from 21 July 2026. The Warm Homes Plan announced in the October 2024 Autumn Budget kept the standard grant at seven thousand five hundred pounds and committed approximately two point seven billion pounds across the scheme lifetime to 2029 to 2030.¹

The application path and the role of the MCS installer

The householder cannot apply to the scheme directly. The path is initiated by a Microgeneration Certification Scheme (MCS) registered installer, who designs the heat pump system to the MCS Heat Pump Standard MIS 3005-D, issues a voucher request to Ofgem on behalf of the household, and receives the voucher allocation within fifteen working days. The voucher window is then six months from allocation to claim; the installation must complete inside that window, with commissioning under MIS 3005-D. On claim, Ofgem pays the installer (not the household) the grant value, within twenty five working days of the claim packet being complete. The household contracts with the installer at the full price minus the grant value; the grant is netted at point of sale so the household never sees the cash.

The eligibility rules are tight by design. An owner occupier replacing fossil fuel heating (gas, oil, LPG) in a primary residence is eligible. Private landlords are eligible if the dwelling is let on an assured shorthold tenancy. Self builders are eligible from 2025. New build housing is out of scope, because the Future Homes Standard 2025 already prohibits fossil fuel heating in new dwellings in England. Social housing is out of scope, because the Warm Homes Plan local authority delivery is the funding route for that sector. Second properties and holiday lets are out of scope.

The deployment trajectory against the Climate Change Committee pathway

The cumulative MCS heat pump count passed two hundred and fifty thousand during 2024, a milestone the MCS marked publicly. Annual installations moved from about thirty thousand in 2022 to about sixty thousand in 2024, with the October 2023 grant uplift visible as a step change in the quarterly numbers. The 2025 trajectory is on the order of seventy five thousand. The Climate Change Committee Seventh Carbon Budget (February 2025) requires four hundred and fifty thousand installations per year by 2030 and one and a half million per year by 2035 on the trajectory to net zero by 2050. The gap between the current run rate and the 2030 requirement is the binding constraint on the heat decarbonisation programme, and the policy package combining the Boiler Upgrade Scheme (demand pull), the Clean Heat Market Mechanism (supply push on manufacturers), and the Future Homes Standard (new build cut off) is designed to close it.

The Clean Heat Market Mechanism running alongside

The Clean Heat Market Mechanism, abbreviated CHMM, places an obligation on boiler manufacturers to sell a rising share of heat pumps relative to fossil fuel boilers. Live from 1 April 2025 under the Clean Heat Market Mechanism Regulations 2025, SI 2025/81, with a scheme year one obligation of six percent and a payment in lieu of five hundred pounds per missing credit. Scheme year two, starting 1 April 2026, raises the obligation to eight percent. The mechanism is a supply side complement to the demand side Boiler Upgrade Scheme. It puts the manufacturers, rather than the consumers, on the hook for the rate at which the heat pump market grows, and gives the manufacturers a financial incentive to lower the price of their heat pump units relative to their fossil boiler units.³

The mechanism allows credit trading between manufacturers, so a manufacturer that overshoots the quota in one year can sell credits to a manufacturer that undershoots. The original 2023 design proposed a three thousand pound payment in lieu per missing credit; the November 2024 addendum cut it to five hundred pounds for scheme year one, on the basis that the original level would have been passed through to retail boiler prices in a way that would have undermined the political support for the heat transition.

The Warm Homes Plan: five million homes and fifteen billion pounds

The Warm Homes Plan was announced in the 30 October 2024 Autumn Budget as the replacement for the previous Help to Heat envelope. The headline figures are approximately fifteen billion pounds across the Parliament (the broader budget envelope including capital and resource), of which three point four billion pounds is allocated to the first three financial years (2025 to 2026 through 2027 to 2028) in the Capital Spending Review, and a target of five million homes upgraded across the Parliament. The plan funds four delivery streams running in parallel: the Boiler Upgrade Scheme for owner occupier and private rented sector heat pump installations; the Social Housing Decarbonisation Fund (folded into the plan) for fabric and heat upgrades in registered provider housing; local authority delivery for area based schemes targeting fuel poor households on low incomes in cold homes; and a fabric retrofit programme that funds loft insulation, cavity wall insulation, solid wall insulation, and double glazing through accredited installers.¹

The five million home target and the fabric first sequencing

The five million home target is the dominant Parliamentary metric for the heat transition over the next four years. The composition of the target is heavily weighted toward fabric measures rather than appliance swaps. A reasonable allocation across the five million homes is approximately three and a half million fabric only interventions (loft, cavity wall, glazing) at average cost in the range of three thousand to five thousand pounds per home, about eight hundred thousand combined fabric plus heat pump interventions in EPC band D and worse properties, about three hundred thousand social housing decarbonisation interventions through registered providers, and about four hundred thousand owner occupier and private landlord heat pump installations routed through the Boiler Upgrade Scheme directly.

The sequencing follows the PAS 2035 retrofit hierarchy (the British Standard for residential energy retrofit). The order is fabric first (insulation, glazing, draught proofing), controls second (smart thermostats, weather compensation), low temperature emitters third (larger radiators, underfloor heating), heat pump or other low carbon source fourth, and on site renewables (solar photovoltaic, battery storage) fifth. The hierarchy is structured so the cheapest measures (fabric) come first to reduce the heat demand the heat pump then has to meet, which in turn reduces the heat pump capacity (and therefore capital cost) the dwelling needs, which in turn lifts the seasonal coefficient of performance the heat pump actually delivers in the field. The plan's heavy weighting toward fabric is a direct application of this sequencing at scale.

Local authority delivery and the area based schemes

About a quarter of the Warm Homes Plan envelope is routed through local authority delivery for area based schemes. The local authority identifies clusters of fuel poor households on low incomes in cold homes (typically using a combination of council tax band, English Indices of Deprivation, and EPC band data), procures an installer framework, and runs a delivery programme across the cluster at higher per home density than the Boiler Upgrade Scheme can reach. The area based model is more efficient on installer mobilisation costs (one site visit covers many neighbouring properties) and on social outcomes (the cluster effect reaches households that would not initiate a Boiler Upgrade Scheme application on their own). The trade off is the local authority capacity constraint; the smaller authorities have struggled with procurement and delivery, and DESNZ has paired the funding with a delivery support function (the National Energy Efficiency Data framework) that helps the authorities identify cohorts and design programmes.

The Social Housing Decarbonisation Fund pathway runs in parallel for the registered provider sector. Registered providers (housing associations and local authority housing teams) bid into the fund for capital allocations to decarbonise their housing stock to EPC band C by 2030. The fund covers fabric measures, heat pump installations, and connection to heat networks where the dwelling sits inside a Heat Network Zone. The combined social housing and area based delivery is approximately one and a half million of the five million home target.

The decarbonisation timeline from 2024 to 2050

The heat decarbonisation timeline anchors on five binding dates, six policy commitments, and one statutory target. The binding dates are the Future Homes Standard 2025 commencement (which prohibits new fossil fuel heating in new dwellings in England); the Clean Heat Market Mechanism live date of 1 April 2025 (the manufacturer obligation on heat pump sales share); the Ofgem heat networks regulator commencement of 27 January 2026 (statutory regulation of the heat network market under SI 2026/7); the proposed Minimum Energy Efficiency Standard tightening for the private rented sector to EPC band C in 2028 (new tenancies) and 2030 (all tenancies); and the 2050 net zero target under the Climate Change Act 2008 (the statutory destination). The six policy commitments are the Boiler Upgrade Scheme grant level (seven thousand five hundred pounds, in force since 23 October 2023), the Warm Homes Plan envelope (approximately fifteen billion pounds across the Parliament), the Clean Heat Market Mechanism scheme year two obligation rise to eight percent in April 2026, the Heat Network Zoning rollout under Energy Act 2023 Part 8, the Clean Power 2030 target (which conditions the carbon intensity of the heat pump's electrical input), and the hydrogen for heating strategic decision expected in 2026.¹

What the Climate Change Committee pathway looks like

The Climate Change Committee Seventh Carbon Budget published in February 2025 sets the carbon budget for 2038 to 2042 and the indicative pathway to 2050. The buildings sector pathway has heat pump installations at four hundred and fifty thousand per year by 2030, one and a half million per year by 2035, and a cumulative stock of around twenty million heat pumps in domestic dwellings by 2050. The heat network share of domestic heat rises from two to three percent today toward twenty percent by 2050, concentrated in dense urban centres. The Committee's position on hydrogen for heating is unambiguous: the pathway has no role for hydrogen in domestic or commercial heat, on the grounds that the heat pump route is two to three times more efficient end to end (one unit of grid electricity delivers three to four units of heat through a heat pump; the same unit, converted to green hydrogen and burned in a hydrogen ready boiler, delivers roughly one unit of heat at best).

The hydrogen for heating decision is the one remaining major open question in the heat domain. The Whitby hydrogen village trial was withdrawn in July 2023 after local opposition, the Redcar trial was withdrawn in December 2023 because no hydrogen supply was available at the necessary scale, and the H100 Fife green hydrogen trial went live on 31 October 2025 with three hundred homes on a dedicated network. The Climate Change Committee position (no role for hydrogen in buildings heating) is the strongest signal, but the strategic decision sits with the Secretary of State for Energy Security and Net Zero, and is expected in 2026. The three options on the table are industrial only (the Committee's default), regional rollout in specific clusters, or a deferral to 2030 plus pending further evidence from H100 Fife.

The gap between the current trajectory and the pathway

The heat pump installation gap is the single largest delivery risk on the buildings side of the net zero programme. The current run rate of about seventy five thousand per year needs to grow by a factor of six over the next four years to reach the four hundred and fifty thousand per year the Climate Change Committee pathway requires by 2030. The Boiler Upgrade Scheme (demand pull at the householder level), the Clean Heat Market Mechanism (supply push on the manufacturer level), the Warm Homes Plan (fabric and heat envelope at five million homes), and the Future Homes Standard (new build cut off) are the four levers the policy framework has put in place to close that gap. Whether they close it at the necessary rate depends on installer supply chain growth (the MCS registered installer base is the bottleneck on throughput), on building stock readiness (the EPC band C trajectory in the private rented sector is the main lever), and on the carbon intensity of the electricity grid (the Clean Power 2030 commitment to ninety five percent low carbon electricity by end 2030 is what lets the heat pump's COP of three deliver the carbon savings the pathway is built on).³