Problem Register - #13 · Environment & Energy
Decarbonising home heat
Priority Score
- Scale4/5
- Severity3/5
- Cost of inaction4/5
- Tractability4/5
- Deliverability2/5
- Cross-partisan viability3/5
- Time-criticality3/5
Seven dimensions, each scored 1-5 and summed to a total out of 35. It is a triage and communication tool to compare problems - not a measure of truth. How it is derived is set out in The Method.
The problem
A large share of UK carbon emissions comes from heating buildings - mostly homes, mostly with gas. Cutting those emissions means insulating homes and replacing gas boilers with low-carbon heating across most of the housing stock. The market is not delivering this at anything like the required rate, and a significant minority of households cannot afford to heat their homes adequately at all.
The evidence
Fuel poverty affected over 11% of English households - roughly one in nine - in 2024. Government insulation schemes have repeatedly failed: a recent inspection found very high defect rates in externally and internally installed wall insulation, echoing the earlier failure of the Green Deal, which reached only a tiny fraction of its target. Successive schemes have been launched and scrapped.
Why the market fails
Several failures compound. Split incentives - a form of coordination failure - mean a landlord pays for insulation while the tenant gets the lower bills, so neither acts. An upfront-capital barrier means the cost is large and immediate while the saving is spread over years, and finance for it is not readily available to ordinary households. A carbon externality means the climate cost of gas heating is not borne by the household. And an information problem means households cannot easily judge installer quality - as the defect data shows.
Why it has persisted
Home-heat policy has been a graveyard of short-lived schemes - designed, launched, under-taken-up or botched, and withdrawn - which has destroyed the installer industry's confidence to invest in capacity and skills, which in turn makes the next scheme fail. The benefits are long-term and partly global; the costs are immediate and local; and the contested politics of net zero deny any long-term programme the stability it needs.
Who bears the cost
Households in cold, expensive-to-heat homes - especially the fuel-poor; the installer industry, repeatedly built up and let down; and the climate.
Policy direction - outline only
Proposed mechanism
A long-term, stable funding commitment, so the supply chain will invest; minimum energy-efficiency standards for rented property on a pre-announced timetable, to resolve the split incentive; low-cost public or public-backed finance, repaid through bills or the property, to remove the upfront barrier; and a robust installer accreditation and quality-assurance regime.
Must resolve
How much is grant - for those who cannot pay - versus finance, for those who can; the standard and timetable for rented homes; and the heating-technology mix.
Main risks
Another stop-start cycle if political commitment wavers; quality failures recurring without real enforcement; costs falling on those least able to bear them.