Tory contender Rishi Sunak backs insulation over heat pumps as winter crisis looms

Tory leadership contender and former Chancellor Rishi Sunak has hinted that he will prioritise insulation for low-income households over new technologies such as heat pumps, as the Government scrambles to protect vulnerable energy users this winter.

Sunak told The Times he wants to see hundreds of millions pounds refocused on an nationwide insulation programme, rather than heat pumps and decarbonising public sector building

He said: “If we can refocus that money to do these types of interventions, which are quicker and cheaper, that seems like a sensible thing for us to be focusing on.”

Prior to his announced departure, Prime Minister Boris Johnson was developing plans to divert over £1bn from existing schemes to focus on insulating poorer households.

This included the public sector decarbonisation scheme, however ministers were advised earlier this year it was too late to divert funds from the £450m Boiler Upgrade Scheme, according to The Times.

The scheme provides grants for property owners looking to install low carbon heating systems such as heat pump – providing savings of up to £6,000.

It has been backed by domestic energy giants such as EDF and Octopus Energy, which have committed to a mass roll-out of heat pumps to support a long-term transition away from gas boilers, which will be banned from new builds in 2025.

However, with energy specialist Cornwall Insight forecasting the price cap will peak at an eye-watering £3,363 in January 2023, when demand is at its peak in the coldest months of the year, Sunak is looking for quicker measures to tame energy bills.

Housing hampers energy users as energy bills bite

The UK has among the least efficient housing stock in Europe, which means customers are required to use more energy than households in other countries – a painful issue with energy bills at historically elevated prices.

Earlier this year, EDF Energy revealed 58 per cent of the country’s households only meet the insulation standards from 1976 or earlier.

Its data showed that installing loft insulation could save £250 per year from people’s energy bills, and that the average semi-detached homeowner could shave £285 a year off their energy bill by upgrading cavity-wall insulation and a further £390 a year by updating solid-wall insulation to prevent heat escaping.

Separately, the Building Back Britain Commission, which consists of chief executives from some of the UK’s biggest housing groups, have argued that £200 per year could be saved just from improving a home from an energy performance certificate (EPC) rating of D to C.

It has calculated that the government could spend £2.3bn per year to make 2.3 million of England’s poorest homes more efficient in a “retrofit revolution”.

Meanwhile, less than half of household energy meters are currently defined as smart or advanced according to government statistics.

Price cap forecast (Cornwall Insight)

In the spring Sunak announced a £15bn support package for households, offering savings of up to £1,200 per year for vulnerable energy users.

He told The Times he is prepared to offer more.

“I’m pragmatic, I’m flexible, no one should be dogmatic about this,” he said.

Sunak said he supports the target to cut carbon emissions to net zero by 2050 and believes the target can be met by advances in technology, citing the falling cost of offshore wind and batteries.

He concluded: “With the right set of incentives, the right set of nudges from government, we will bring the cost of those things down. That’s how we’re going to solve the problem.”

The former Chancellor is competing with Foreign Secretary Liz Truss to lead the Conservative Party and become the UK’s next Prime Minister.

Members will vote this summer, with a result expected on 5 September.