Heat pump subsidies “should be better targeted to boost overall installation numbers”, according to energy trade body, Energy and Utilities Alliance (EUA).
The EUA said that replacing direct electric heating systems with a heat pump is a sensible approach to boost heat pump sales and secure energy bill savings for consumers.
Energy bill data produced by EUA shows that the annual average heating costs for a direct electric system on a standard tariff stands at £2,691 per year, compared with £898 for a heat pump on the same tariff.
The data also notes that the average annual heating cost for a gas boiler is £688 per year – lower than a heat pump.
Mike Foster, CEO of EUA, said: “We are pushing consumers to switch to heat pumps but, in doing so, if they currently use gas, we are expecting them to pay more to heat their home. Having spent £13,000, on average, to fit a heat pump, putting up your energy bills is not a great proposition. So why not target those homes where we can cut bills as well as carbon?
“The bill savings for a heat pump, compared to direct electric heating, are huge. Even if that electric heating uses night storage radiators and Economy 7, the savings are still worthwhile at £476 a year.
“Official government statistics show the UK has over two million homes heated by electricity only, [offering] real potential for heat pump sales growth. At the moment, the Boiler Upgrade Scheme subsidy shows only 6% of recipients are swapping direct electric heating for a heat pump, compared to 56% who used gas.
“A heat pump is considerably more efficient than direct electric heating options, so there are considerable carbon savings to make as well as bill savings. This makes for a powerful double-whammy compared to switching from gas to a heat pump.”