How can Governments push people to buy heat pumps?

Domestic heating and cooling account for 14 per cent of carbon emissions in the UK every year, and 85 per cent of that is from gas boilers. We urgently need to decarbonise heat to help the country reach net zero.  

But how can this happen when the alternative – ground and air-source heat pumps – are, at best, over three times the cost of a gas boiler and a tiny percentage of heating installations? 

This was the situation when researchers at WBS and I started work on the Interdisciplinary Centre for Storage, Transformation and Upgrading of Thermal Energy (i-STUTE) in 2013, with £5 million of funding from the UK Government's Engineering and Physical Sciences Research Council.  

The five-year programme offered insights into how behavioural science could help shape consumer behaviour and encourage the uptake of this new technology.

The answer, we found from our research, was that behavioural science could nudge people towards installing heat pumps instead of gas and that some messages were better than others.

We now see this research reflected in the policies and subsidies offered by the UK Government. But there’s more to it than a householder making a decision, because we still need to address the broader context and that’s where we are now heading in our research plans. 

Governments like behavioural science. They want to know how they can influence people to change and support new policies.

In our research, we looked at several behavioural science concepts to see how consumer messaging could persuade people to switch to heat pumps.  

Take the problem of cost. A behavioural science understanding says people tend to choose short-term savings over long-term ones. This is known as temporal discounting. While we found that participants were more patient than we might have expected with the idea of savings in the long run from their heat pump, a high upfront cost can still put people off.  

When we did our research, the UK Government offered quarterly payments over seven years for people installing greener heating systems, including heat pumps. Since May 2022, households with traditional oil or gas boilers can apply for a £5,000 grant for an air source, and £6,000 for a ground source, heat pump, paid once the system is up and running. This reform directly addresses the problem of temporal discounting. 

Another concept we looked at was the idea of alignment effects – what happens when people compare products to make a choice. Think of how online stores or consumer websites provide a table that compares products and you choose the one that is a bit better. 

How framing can help nudge people to buy heat pumps

But heat pumps work in a very different way from gas boilers. If people try to compare what is unfamiliar, they tend to go with what they know. And offering a grant for only one choice – the heat pump – prevents that alignment effect too. So we tried to avoid comparisons when presenting the benefits of heat pumps.. 

An unsurprising observation was that people’s interest in heat pumps was higher when presented (or ‘framed’ to use the behavioural science term) as an environmental issue, like we did here: "To reduce your carbon emissions, would you consider installing a heat pump…?” 

More of a surprise was that who promotes the message was less critical than seen in other studies. Usually we see a ‘messenger effect’ where people's choices are influenced by who they get the information from. We didn't find that in our study. 

We concluded that buying a heap pump was a big enough spending decision that people would spend time thinking about it rather than relying on someone else's view. 

The Boiler Upgrade Scheme started last May, and recent articles in the press have suggested a low uptake of heat pump grants. With a plan to give out 30,000 grants yearly over three years, the Government has approved only a third of its first yearly allocation in the first eight months. 

Even allowing for inevitable delays in processing grants for a new scheme, with the limited budget available, we are a long way off the number of upgrades we need to achieve climate targets. 

Two broader challenges are: who'll pay for upgrading the electricity network, and whether we have the right companies trained and ready to carry out all the work involved in installing heat pumps.

More heat pumps and growing numbers of electric vehicles will create demands on the grid and creates the need for upgrades. The National Grid announced plans in 2022 to upgrade the electricity network to add capacity for offshore wind, with the costs shared across all consumers’ bills. 

But local upgrades are managed by the distribution network companies where it’s less clear who should pay – should the homeowner pay or should the distribution company pay, spreading the cost across all bills? 

Why the energy industry needs to help to scale up heat pumps 

A requirement for the Boiler Upgrade Scheme is that householders have approved cavity wall and loft insulation, plus a valid Energy Performance Certificate with no outstanding recommendations. While that's important, so that heat pumps perform as expected, it can point to the need for more work to make the house ‘heat pump ready’.

Few companies that currently install heat pumps are ready to offer a holistic view of energy in the home and carry out the range of services that make the most sense overall. And only some householders are aware of the extra cost and disruption it might involve. 

Behavioural science can help answer these challenges, but joined-up thinking is also needed to address these system-wise issues.  

We began by looking at a series of behavioural science concepts, aiming to determine which would help encourage consumers to decarbonise heat by installing a heat pump. 

And in many ways, this framing can now be seen in Government policies such as the new Boiler Upgrade Scheme. That's the good news.  

We now need to consider changes in the broader industry so it can scale up and meet the UK’s aims for green growth. 

Further reading:

Hafner, R. J., Elmes, D. and Read, D. 2020. Exploring the role of alignability effects in promoting uptake of energy-efficient technologies. Journal of Experimental Psychology: Applied, 26, 2, 300-311

Hafner, R. J., Elmes, D. and Read, D. 2019. Exploring the role of messenger effects and feedback frames in promoting uptake of energy-efficient technologies. Current Psychology, 38, 1601-1612

Hafner, R. J., Elmes, D. and Read, D. 2019. Promoting behavioural change to reduce thermal energy demand in households: a review. Renewable and Sustainable Energy Reviews, 102, 205-214

Hafner, R. J., Elmes, D., Read, D. and White, M. P. 2019. Exploring the role of normative, financial and environmental information in promoting uptake of energy efficient technologies. Journal of Environmental Psychology, 63, 26-35

David Elmes is Professor of Practice in the Strategy and International Business Group and teaches Creating Sustainable Organisations on the Distance Learning MBA. He also lectures on Business & Sustainability on the Executive MBA and Managing in a New World on the Full-time MBA plus Business Immersion and Critical Thinking on the suite of MSc Business programmes.

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