Journal
ENERGY POLICY
Volume 138, Issue -, Pages -Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2019.111198
Keywords
Heat pumps; Low carbon space heating; Taxes and levies; Renewable heat incentive
Funding
- Oxford Martin School, University of Oxford, United Kingdom, through the Oxford Martin Programme on Integrating Renewable Energy
Ask authors/readers for more resources
In Europe, space and water heating account for approximately 80% of final energy use in the domestic sector. For many European countries the electrification of heat provision, via heat pumps (HPs), provides a promising decarbonisation pathway. The UK is no different, but recently concerns have been raised about the financial attractiveness of HPs given how, through various policy choices, taxes and levies are applied more heavily on electricity bills than gas bills. In this paper, we critically examine this argument by assessing the financial attractiveness of HPs across their lifetime for a typical UK household and within the current UK tax and regulatory regime. The results suggest taxes and levies do weaken the economic case for HPs: their current distribution having an unintended impact on the economics of HPs. Nonetheless, they are not the only reason for HPs comparative financial disadvantage. Upfront costs and HP performance, both influence the extent to which taxes and levies impact the economics of HPs. The results have implications for the future deployment of HPs in the UK and point towards policies to increase deployment (to drive down costs) and increase HP performance as being important.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available