My Lords, discussions on heat pumps are always interesting. Everyone seems to have a view, although few have any experience of actually running the things; I find that this is particularly the case with those who are the most enthusiastic about them. I would love to know how many noble Lords who have spoken today have installed a heat pump—indeed, whether the Minister or any other member of the Government has done so. For the record, I have; I have two heat pumps, in fact, so I do speak a little from experience.
I welcome the scheme even if, from a personal point of view, I regret that it has come a bit late for me —although I do benefit from the RHI scheme, which over its life is slightly more generous. We need to bring down the costs of heat pumps if we are to encourage their uptake. This scheme is simple and up front, so I think it is likely to be more successful than the RHI scheme, which is complex and, frankly, rather tedious with having to measure everything and send in the forms every three months.
I want to raise a couple of points of caution, based both on my own experience with heat pumps and on publicly available information, including an Answer from the Minister to a Written Question I submitted to him about a year ago. Heat pumps are often stated as being able to generate heat equivalent to three to four times the electrical energy that is put in; I have seen claims of up to five times. There has been quite a lot of press coverage over the weekend suggesting that, with these grants and based on that kind of efficiency claim, heat pumps could now be cheaper than gas. There is plenty of coverage saying it; it is not right, but it says it. Advertising in brochures for heat pumps often talks about those sorts of efficiency multiples. My own pumps claim they should achieve 3.2 times efficiency; they are less efficient high-temperature pumps, which is why it is a slightly lower number.
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High expectations of these things are being set, but, sadly, the efficiency claims and performance are rarely, if ever, achieved—and only in absolutely ideal situations.
When you read the small print in the brochures or whatever, you find that the claims tend to be made when the outside temperature is 15 degrees centigrade or higher and the output hot water set at 35 degrees, which is somewhat lower than normal domestic hot water temperatures of 50 to 60 degrees. Efficiency drops really quite dramatically as the outside temperature drops. Efficiency at zero degrees outside temperature can be less than half what it is at 15 degrees. The same happens as you push the output hot water temperature up.
My own experience has been a peak coefficient of performance of about 2.5 times and an average close to 2.1 times. The Minister’s Answer to the Written Question I mentioned suggested a seasonal average of around 2.4 times. These are all substantially lower than the public claims we all read about in the press, on green websites and, in particular, in manufacturers’ advertising. With electricity prices being what they are, the reality is that heat pumps are very unlikely to save money against gas.
This also does not take into account the little secret that no one tells you when you install an air source heat pump: the defrost cycle. As the outside temperature drops, the pump has to work harder. As well as becoming less efficient, it starts to collect ice around the coil, especially when the air is humid; a typical cold, damp UK winter day is about as bad as it gets. It then has to defrost, which it does by taking heat back out of your hot water tank, so just when you need heat the most, the heat pump is producing the least heat and at times actually taking heat out of the system.
The difference between a coefficient of performance of a claimed 3.5 times and an actual 2.4 times makes an incredibly substantial impact on the running costs. In many houses, other than those with perfect insulation, you may well need a secondary heat source during cold snaps to make up for the lower output and defrost problems I have just described. In my case, an additional electric boiler and a wood-burning stove have made the system workable when the outside temperature drops below about 2 degrees centigrade.
I am not trying to undermine the scheme. Heat pumps are an excellent solution in the right circumstances and will be an important part of our move to net zero, but I am really concerned that we may see a VW dieselgate-style mis-selling scandal if we are not careful and people buy heat pumps based on the unrealistic claims made to them and then find them very much more expensive to run than expected and producing less heat when it is really needed, compared with their existing boiler. If people feel misled, uptake will fall away quickly and the scheme will fail.
Can the Minister confirm that manufacturers and installers will be required to state clearly in their advertising and installation literature the real-world expectations of efficiency and running costs and realistic heat output in a typical UK winter, rather than the unrealistic claims that are currently made? This real-life information should also be included in the MCS database, rather than just the perfect information in there at the moment. As I have said, heat pumps are an excellent solution in the right circumstances, but people need to know what they should realistically expect before they buy.
I have a small second point. I was rather surprised to discover that installing a heat pump can actually have a negative impact on energy performance certificates. That means that, for a landlord looking to achieve the required EPC, there is a disincentive to install a heat pump. I have this problem as a landlord, albeit in Scotland—so it is devolved—but I think the same is true in England. That cannot make sense, so if the Minister could look at that I would be most grateful.