Written by Aidan Bennett
As we push towards a greener future in the UK, the cost of electricity compared to gas remains a significant hurdle in our journey towards net-zero emissions. This price disparity isn’t just a matter of household budgets—it’s a critical factor affecting the adoption of low-carbon heating technologies and, consequently, the success of decarbonising domestic heating.
Understanding the Price Gap
Currently, electricity in the UK is considerably more expensive than gas. This situation arises from several factors:
- Gas-dependent pricing: The wholesale price of electricity is often set by the cost of gas-fired power plants, which are called upon to meet peak demand.
- Uneven taxation: While electricity is subject to carbon pricing through schemes like the UK Emissions Trading Scheme, residential gas use isn’t taxed in the same way.
- Policy costs on electricity bills: Historically, the costs of various social and environmental programmes have been loaded onto electricity bills rather than gas bills
The Heat Pump Challenge
This price disparity creates a significant barrier to the widespread adoption of heat pumps—one of the most promising technologies for home decarbonisation. Despite their efficiency, the higher cost of electricity means that running a heat pump can be more expensive than operating a gas boiler.
For heat pumps to become the obvious choice for homeowners, we need to see the ratio of electricity to gas prices fall to approximately 2.5 to 1. At this level, the long-term costs of running a heat pump could undercut those of a gas boiler, even when accounting for higher installation costs.
Implications and Solutions for the Retrofit Industry
As professionals in the retrofit sector, we need to be aware of these challenges and advocate for policy changes that will level the playing field between electricity and gas. Potential measures could include:
- Shifting levies from electricity bills to general taxation
- Introducing carbon pricing on residential gas use
- Offering specific electricity tariffs or discounts for heat pump users
In the meantime, we should focus on maximising the efficiency of heat pump installations. This includes proper sizing, optimising distribution systems, and educating homeowners on best practices for operation.
At City Science, we’re developing cutting-edge solutions to address these energy challenges. Our team is continuously refining our approach to retrofit, ensuring we provide the most effective strategies for sustainable home heating.
From advanced modelling to practical implementations, we’re working to make low-carbon technologies the obvious choice for UK homeowners.
Curious about our innovative solutions? Check out our other blogs or visit our website to learn more about some of our work. Retrofit – City Science