Insights

Clean heat

For clean heat to transform our day-to-day standard of living, electricity bills need to incentivise the switch, and people and businesses need access to finance, understanding of the technology and consumer protections.

We’re showcasing what our members are doing, and exploring the policies needed to deliver clean heat that lowers bills for energy customers, boosts economic growth, and creates jobs across the country.

Explore the Clean Heat report series

Tune into Clean Heat discussions

Read more about clean heat

Energy UK has launched its Clean Heat campaign to ensure that, with the right policies in place, the Warm Homes Plan can help households and businesses switch from fossil fuel to clean heating systems.

This will meaningfully bring down energy bills by providing protection from volatile international wholesale gas prices and create the opportunity to use energy flexibly and secure bill savings, all while supporting growth and new jobs.

The Warm Homes Plan sets out the Government’s ambition to bring down energy bills by investing £15 billion into the installation of clean heat and other low-carbon technologies, upgrading five million homes over this Parliament. Key announcements in the Plan include £2 billion support for consumer low and zero-interest loans, £5 billion of support for low-income households and £1.1 billion for heat networks.

The Plan sets the strategic direction for the delivery of clean heat with key measurables such as a target to install 450,000 heat pumps annually by 2030, 70% of UK-sold heat pumps manufactured in the UK by 2035, and to grow the heat network sector to deliver 7% of heating demand, also by 2035.

Support for consumer loans is a win for Energy UK, with our analysis finding that by installing clean heat, solar and a battery, a household could reduce its energy bills by up to 64%. We are also pleased to welcome the continuation of the Green Heat Network Fund, building on Energy UK’s work pushing for further Government intervention to remove investment barriers to help the sector deliver low-cost, low-carbon heat to homes and businesses.

The Government aims to unlock £38 billion total investment through its Warm Homes Plan, creating 180,000 jobs across the UK. Energy UK will support the sector in harnessing this economic opportunity by supporting the Green Finance Institute’s Strategic Partnership, and with representation on the Warm Homes Plan Workforce Taskforce, both initiatives will be co-chaired by the Minister for Energy Consumers.

Join the clean heat discussion

Webinar: How clean heat can bring down bills

Sponsored by Frontier Economics, the webinar included additional speakers from Octopus Energy, Mitsubishi Electric and Citizens Advice.

The panel discussed how to make it easier for consumers to access clean heat, and how to engage households on the transition.

Webinar: How clean heat can bring growth in 2026?

Sponsored and chaired by Oaklin Energy, the event included a panel of speakers from Energy UK, Vital Energi, British Glass and Carr & Carr (Builders)/Federation of Master Builders.

The panel reflected on some of the major barriers to the roll out of clean heat in 2026 across the industrial and commercial and new build sectors, and explored some of the innovative district heat network projects underway in the UK. The panellists also discussed some of the major policy changes needed to create demand and drive adoption of clean heat across a range of sectors in the UK, in order to keep pace with the Government’s decarbonisation objectives, and its newly-announced targets in the Warm Homes Plan.

The discussions took place the day after the publication of the Government’s Warm Homes Plan. Alongside a landmark £15 billion investment, the strategy set the direction of travel for the Government’s domestic retrofit plans for the remainder of this Parliament.

While many in the sector welcomed the ambition and the detail set out in the Plan, what is still missing from Government policy is a clear way forward for how non-domestic (business) energy customers will bring down their energy bills and decarbonise their demand. This Breakfast Briefing convened stakeholders from the energy and built environment sectors to discuss how clean heat can help drive growth in the UK economy.

Speakers on the panel were:

Dominic Hurndall, Partner, Oaklin Energy (Chair)
Kenza Bennis, Head of Analysis, Energy UK
Chris Carr, Managing Director, Carr & Carr Builders/ Immediate Past President, Federation of Master Builders
Nick Gosling, Policy and Strategy Director, Vital Energi
Paul Pearcy, Federation Manager, British Glass

Dominic Hurndall, Oaklin Energy, set the context for the discussion, noting the very fluid policy landscape driving heat decarbonisation in the UK. The Warm Homes Plan, while providing significant ambition, delivers a broad set of policy changes for domestic buildings that will have a significant effect.

Dominic drew out key themes which united the panellists despite their very different industry backgrounds, including the high cost of low-carbon heat and electricity, the role of incentivisation and affordability in driving adoption, and ultimately the need to attract international investors into the UK given global competition for capital. Dominic talked about the importance of adopting systems-thinking to resolve these challenges.

Kenza Bennis, Energy UK, said that the expansion of clean heat represents a significant economic opportunity for the UK in terms of heat pump manufacturing, and investment in heat network infrastructure. However, Kenza outlined that there are significant policy gaps in unlocking this economic potential, with the Climate Change Committee showing that growth in heat pumps and industrial decarbonisation represent key risk areas for the Government in its progress to meet emissions reductions targets.

Kenza said that action was urgently needed, with the npower Business Energy Tracker survey for 2025 finding that 97% of businesses worried about their energy costs.

Nick Gosling, Vital Energi, talked about how Vital was bringing forward innovative solutions to provide building owners with low-carbon heat.

Vital’s district heating programme in Leeds delivers waste heat recovered from an energy from waste plant to 2,000 homes and public sector and commercial buildings in the city centre. Elsewhere, in Glasgow, the Queens Quay project harnesses ambient heat from the River Clyde to deliver heat to homes and non-domestic buildings. These projects have been supported by the Government’s Green Heat Network Fund, and the Warm Homes Plan includes continued funding for them until 2030. However, while this capital support was important, Nick noted that further work was needed to bring down the cost of clean heat relative to fossil fuels.

As well as laying pipes in the ground, Vital is building its own talent pipeline by working in conjunction with Salford College where they have recruited 62 candidates onto their apprenticeship programme.

Paul Pearcy, British Glass, noted that glass manufacturing is a foundational industry for the UK. The industry consumes 6TWh of gas and 1TWh of electricity per year, producing 1.5 million tonnes of carbon dioxide in the process.

Investors in the glass industry are global organisations that are continuously assessing Britain’s competitive edge. In this context, there are significant barriers to manufacturing industries like glass tackling their emissions.

While the technical expertise is available to decarbonise, and fully electric furnaces and hybrids have been built in Europe, electricity remains uncompetitive for UK businesses and this is hampering their ability to transition. Manufacturers in hydrogen clusters are looking at using higher levels of hydrogen, and biofuels also have potential to meet demand, but they are also sought after by the aviation and maritime industries, too.

The Government’s Industrial Strategy has made progress on some of these issues, with the introduction of the British Industry Supercharger (BIS) and the Network Charging Compensation Scheme. However, more is needed, and Paul referenced efforts in Germany to establish a Contracts for Difference-style scheme to support electrified business models.

Chris Carr, Carr & Carr (Builders) Ltd, gave the perspective of small to medium-sized (SME) house builders, noting that they are typically reactive to regulatory change compared to their larger PLC counterparts. Chris said that SME developers are often managing a range of pressing issues including planning applications, access to finance and acquiring land, meaning clean heat is less of a priority.

Indeed, Chris said that efficient building design was foundational for good consumer outcomes, independent of the heat source used in the building. Carr & Carr is currently trialling the development of two electric homes, and the process has necessitated significant changes to the design of the building and its fabric construction, as well as the way in which tradespeople are working together on site. Chris estimated that these properties, which are using infrared panels, solar PV and batteries, are costing an additional £15,000 to £20,000 to build per unit compared to those built to existing minimum standards.

Chris called for more consistent communication from Government about regulatory changes in new build developments, greater public education about electrification and a holistic approach to policy design that caters for all clean heat solutions.

Audience questions covered a broad range of issues, including how heat networks could build consumer and investor confidence in the sector while growing supply chain capacity, how the new build sector could elevate and innovate in its output beyond the minimum standards set by regulations, and skills and training provision to meet growing demand for clean heat.

Dominic closed the event by responding to the central question of what will drive growth in the clean heat sector. At its simplest level, Dominic said that adoption drives growth, and that it was necessary to create the demand for clean heat. As the framework of policies begins to come together to achieve this, communication to consumers will be critical to driving the transition.

Ministerial roundtable

Energy UK partnered with HermeticaBlack to hold a roundtable in Parliament with Minister McCluskey, welcoming the Warm Homes Plan and discussing how to fund the clean heat transition in response. This meeting brought together Energy UK members from across the clean heat sector, and key stakeholders from the Government and its Departments.

The themes covered included how to move swiftly from strategy to delivery, what support is needed to realise the Government’s ambition for the heat network sector, and the importance of bringing down energy bills for all customers.

The Clean Heat report series

With reliance on gas leaving British households financially stretched and vulnerable to volatile energy prices, it’s understandable that billpayers have come to hold the common belief that the cost-of-living crisis will never end.

However, the Government has presented a real opportunity to improve the living conditions of millions of people over this Parliament – significant investment in the Warm Homes Plan to improve the quality and efficiency of existing homes and buildings in the UK. This series of reports will explore policies needed to do this.

Clean Heat Financing the transition hub report by report2

Balancing the bill

This is the first of Energy UK’s Clean Heat series of policy reports, which aim to show how the transition to clean heat can be delivered in a way that lowers bills for energy customers and boosts economic growth, jobs and skills across the country.

Read the report

Financing the transition

This is the second of Energy UK’s Clean Heat series of policy reports, which aim to explores the actions needed to attract capital investment from both households and investors into the clean heat transition

Read the report

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