Heat pumps could lift people out of fuel poverty, say UK researchers

Scientists from the United Kingdom have evaluated the impact of heat pumps on fuel poverty in England and Scotland. Their analysis considered pre- and post-energy crisis prices using levels from 2019 and 2022, which were shaped by the pandemic and the Russia-Ukraine war.

“Fuel poverty is a state where households struggle to afford the energy needed to heat their homes comfortably. The far-reaching consequences include physical and mental health issues, increased financial demands on national health systems, and environmental implications due to the energy inefficiency of fuel-poor homes,” the researchers explained. “This study uses the ‘10% definition:’ A household is considered to be in fuel poverty if its necessary fuel cost is more than 10% of the household adjusted net income.”

The researchers based their analysis on housing surveys from Scotland and England and considered net income, energy consumption, and fuel type. They found that, in pre-crises times, the fuel poverty rate in Scotland was 35.55% and 17.38% in England. This value increased in crisis time to 67.26% in Scotland and 47.68% in England.

“The Pearson correlation coefficient between the off-gas proportion and the pre-crisis fuel poverty estimation is 0.81,” the researchers said.

Heat pumps have lower running costs than off-gas, which the scientists believe is enough to lift people above the fuel poverty line. However, users have to face high up-front installation costs, which were reduced in the United Kingdom with policy support of GBP 5,000 ($6,340) during the research period. The researchers said that policy support can lead to fuel poverty reduction in at least 90.2% of regions in normal periods and in 97.6% of regions during crises in England and Scotland . Without government support, the numbers drop to 51.2% in normal times and 65.9% during crises.

The network upgrade cost is another burden to the heat pump adoption, which trickles down to household bills. It is expected that 457 out of 3,891 primary substations in England and Scotland will require upgrades to support the additional heat-pump demand. The total estimated cost of these upgrades is GBP 715.4 million, divided over a lifespan of 45 years.

“Aberdeenshire has the highest average network upgrade cost due to its relatively high proportion of off-gas homes (41.2%),” the academics explained. “In particular, the two archipelagoes in the north (the Orkney and Shetland islands) with almost 100% off-gas homes still see relatively low upgrade costs. This counterintuitive result comes from the fact that more than half of households have used electric heating. Replace these electric heaters with [heat pumps] can be less burdensome on the network due to the high [heat-pump] efficiency.”

The researchers then shifted to a cost-benefit analysis and found that certain regions such as Shetland and the Orkney Islands exhibit low costs and relatively high benefits in pre-crisis periods. In times of crisis, these areas also experience low costs and high benefits.

“In contrast, few regions, such as Aberdeenshire and East of England, see fewer benefits and high associated costs,” the group said. “These results can help policymakers design and prioritize regional [heat-pump] support mechanisms and deployments.”

The researchers presented their analysis in “Evaluating the Social Benefits and Network Costs of Heat-Pumps as an Energy Crisis Intervention,” which was recently published on iScience. The research group included academics from the University of Edinburgh and the University of Oxford.

“Our findings demonstrate that [heat-pump] benefits endure in both normal and crisis periods,” they said. “This means that even if the crisis ends before [heat-pump] adoption reaches a substantial level of impact, adopting [heat pumps] can still yield long-term benefits, particularly considering the possibility of future energy crises.”