The hidden green tax punishing families without a garden

If you live in a flat or a small terrace, you may be penalised for the home you live in. Our research shows that 57% of the lowest-income households live in these types of properties. Yet current government policy is skewed towards a one-size-fits-all solution - the heat pump - that simply isn't practical for everyone.

To be clear, heat pumps are the right and most economical solution for a huge number of properties. But for a family in a leasehold flat or a cramped terrace, finding space for an outdoor unit is impossible. You might not own the external wall, your neighbours are right next door, the cost and disruption of replacing pipework is astronomical.

This is where heat batteries come in. They are a clever box that stores heat like a phone stores charge. It fits inside your home, works with your existing radiators, and can charge up when electricity is cheap overnight, then release that warmth during the day or an evening cold spell. They are a sensible choice for lots of urban homes.

But the Government gives a £7,500 grant for a heat pump. For a heat battery, the grant is going to be just £2,500 (and that is not even available yet) - despite the installation costs being almost identical.

In the Government's own modelling for a small home, a heat pump costs £9,300 to install, while a heat battery costs £10,200. That is a difference of just £900, but because of the grant disparity, the household seeking a heat pump pays £1,800 out of pocket, while the family suited to a heat battery is left with a bill of £7,700. A £900 gap in cost becomes a £5,900 penalty for the family choosing the technology that fits their home.

For a lower-income family, that £5,900 is an impossible barrier. In the second-lowest income bracket, this sum represents nearly half of their annual income after housing costs. With almost half of UK families having less than £1,500 in savings, it's simply unaffordable. We are effectively telling people: your home is complicated, so you must pay a premium to go green.

Technical feasibility is only the first step. Whether a household can practically install and afford the right solution for their specific circumstances matters far more. Government must wake up to this reality.

So, what needs to change? First, equalise the grant. A heat battery delivering clean heat should receive the same £7,500 as a heat pump. Second, fix the VAT anomaly - currently 20% on heat batteries compared to 0% on other clean tech. Third, model policy on the homes people actually live in, not just the detached houses that are easiest to serve.

The path to net zero cannot be a luxury good for those who can afford a garden. No household should pay a heavy price for clean heat simply because of the type of property they call home. If we are serious about a just transition, we must support families based on what works for them.

____________________

Sarah Honan is Head of ADE: Demand, the UK’s largest non-profit trade body for organisations that use, manage and optimise energy demand.

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

To contact us email opinion@lbc.co.uk