How has the energy industry responded to the Spring Budget

The energy sector has provided a mixed response to Jeremy Hunt’s recent Spring Budget. The Budget included a three-month extension of the £2,500 price cap to reduce the pressure felt by the UK’s households but failed to offer a Climate Change Levy focus change from electricity to gas, something that many industry experts were calling for.

“Only a temporary measure”?

Martyn Bridges, Director of Technical Services at Worcester Bosch, said: “We welcome the Chancellor’s three-month extension of the £2,500 price cap to reduce financial pressures on UK households”. However, he described it as “only a temporary measure”, saying his company had hoped to see a national grant scheme that would encourage homeowners to get their properties properly insulated to boost the country’s energy efficiency. Bridges said this solution would help to cut energy usage and long-term costs.

Bridges also said that the cost-of-living crisis was leaving homeowners unlikely to consider property improvements, which he said could have a “knock-on effect on our road to decarbonised home heating, as more efficient homes are suited for low-carbon technology”. He said that his company hoped to see more commitment and measures from Government to support homeowners to increase their EPC Ratings soon.

“A short-term sticking plaster”?

Trevor Harvey, CEO of Stelrad Group plc, said “The Chancellor’s U-turn on energy bill support will come as a welcome relief to people struggling with their heating bills but it was a shame that there was nothing beyond this”. He said there had been a “real opportunity” in the Budget for the Government to help people heat their homes more effectively in the long term but described the announcements actually made as a “short-term sticking plaster”. He urged the Government to incentivise homeowners to carry out measures like installing energy-efficient radiators and investing in better insulation.

He said short-term price guarantees and encouraging the mass adoption of heat pumps (which he described as unsuitable for most UK homes” wasn’t a “coherent strategy that will help the country reduce its heating bills”. He called for a “more effective plan to help the country’s houses become both more efficient and less carbon-intensive.”

Are heat pumps the future of UK energy?

Daikin UK Corporate Department Manager Henk Van den Berg said: “Yet again this budget has ignored the clear case for shifting the Climate Change Levy’s focus away from electricity to gas, leaving low-carbon heating out in the cold.” He said a heat pump would save 5-10% in running costs compared to a gas boiler but that further savings were difficult due to what he called an “outdated tax” on the electricity powering them.

Van den Berg said more needed to be done if heat pumps were to become mainstream enough to help the UK reach net zero. He asked for better communication on the topic of heat pumps versus fossil fuel systems to encourage more interest in the Boiler Upgrade Scheme.

At Ability, we are always here for you when you’re ready to invest in new energy-efficient appliances for the home including boilers and smart thermostats. To find out more, complete the form on our website, call us on 01892 514495 or send a message to info@ability.uk.com. We will get back to you as quickly as we possibly can.