Analysis attests multiple benefits of cleantech homes

Domestic heating is currently responsible for around 18% of UK carbon emissions, so building homes with electric rather than gas heating is a vital move towards ensuring a sustainable future. 

To build on the current figure – with nearly 16% of new houses and 33% of all homes, including flats, having electric heating – the previous government proposed regulation in the form of the Future Homes Standard to mandate heat pumps, and perhaps solar photovoltaics, in new-build homes in England and Wales.      

Consultation on the standard has closed, and it will be for the new government to decide how to progress with this. If it is implemented, an estimated 50% of new homes will have heat pumps by 2027, 95% by 2028 and 100% by 2029. These new homes can be considered as having clean technology, or cleantech.

These homes can be considered net zero ready because they have only electric appliances, and the energy they use will be carbon-free once the National Grid achieves its 100% clean electricity target, currently targeted for 2030.

As well as lowering emissions, cleantech homes can reduce energy bills, potentially increase house value, and enable lower cost electricity grid expansion through flexible operation.

The consultancy Baringa Partners, in partnership with Octopus Energy, recently published a report on such homes for the Sustainable Markets Initiative. The report showcases the progress made in this sector, as well as underlining the need for policy to foster the transition from gas to clean technologies.

This differential is even greater when such homes are compared to existing gas-heated properties, at around £1,300 a year, or a 53% saving. Analysis by Baringa and Octopus even shows that people can eliminate their bills entirely by having larger amounts of solar and battery storage.

The reason for these savings is twofold. First, new builds are far more energy efficient and therefore require less energy to run, reducing cost. 

Second, heat pumps generate around three to four units of heat for every unit of electricity and are thus much more efficient than gas boilers, which generate 0.9 units of heat for every unit of gas. Analysis also shows that there are savings over a 25-year period, even when considering asset replacement cycles and general maintenance.

Research by the University of Cambridge's Department of Land Economy suggests a 16% value uplift for new-build homes that have enough solar and battery storage to eliminate energy bills. A further study of more than 5m existing homes indicates a 2–3% increase in value for those with solar panels or heat pumps, compared like for like with gas-heated homes.

This more than offsets the extra investment in both technologies, so should reassure housing developers concerned about expenditure eating into profits. 

Banks are increasingly looking at whether cleantech homes could allow for responsible adjustments to mortgage affordability assessments.

Mortgage providers are also recognising the financial and environmental benefits of lending to cleantech homes, and are launching innovative products to support them.

A survey of 2,894 Octopus customers, carried out by Censuswide for Baringa in June 2024, found that 91% of people who switched to a heat pump are satisfied with its performance. This greatly exceeds satisfaction rates for boiler users, which are only 74%. 

Consumer interest in cleantech homes is also growing. Since 2020, searches for solar panels and heat pumps on Rightmove's website have risen from the top 500 to the top 100, and from beyond 1,000th place to 200th, respectively.

This should be more than enough for new-build installations, which according to Baringa analysis could reach 120,000 a year by 2028. However, continued efforts are needed to meet maintenance demands and the number of installations increases. 

Assuming 1m heat pump installations a year, we could need 14,200 full-time installers by 2030, or 45,000 working part-time given that many will be capable of working both on gas boilers and on heat pumps.

Cleantech homes support power grid expansion. The inherent flexibility of electricity demand in these properties can help manage challenges with grid connections.

While increasing electricity demand can present new requirements for grid infrastructure, electrification of energy use in transport and heating is fundamental to achieving a net-zero economy and therefore must happen.

If it can be used flexibly, meaning energy demand avoids peak periods while performing the primary function of the technology, i.e. heating and transporting, this will minimise need for new grid infrastructure and keep societal costs down.

Electric vehicles can be charged at night when electricity demand is low, and hot water tanks can be heated with heat pumps outside peak hours. 

There are examples of innovative best practice to manage the connection of new cleantech developments. For example, some have reduced connection capacities by 15% by taking advantage of flexible technologies such as batteries.

New housing developments which incorporate electric heat pumps in combination with batteries and solar panels can have lower energy costs versus a standard grid connection.

This is because the cost of building and generating renewable energy from the solar panels and storing it in a battery to avoid expensive peak periods can be cheaper than the grid alternative.

By transitioning to electric heating, integrating solar panels and batteries, and flexibly operating assets to avoid peak periods, these homes demonstrate how sustainable living can be both practical and affordable. 

The evidence is clear: cleantech homes lower emissions, reduce energy costs, and improve air quality, while also enhancing property values and providing a higher level of comfort and satisfaction for residents.

However, achieving widespread adoption will require continued government support, robust policy frameworks, and sustained industry training to meet the growing demand for installations and maintenance. 

Collaboration across sectors, from housing developers to energy providers, will be critical in addressing challenges such as grid infrastructure and peak energy demands.

As the national grid edges closer to its 100% clean electricity target by 2030, cleantech homes are poised to become the foundation of a sustainable, net-zero-ready future.

By embracing this transition now, we can ensure a healthier planet and a more resilient economy for generations to come.