Last month, Mr Johnson admitted that heat pumps, seen as an alternative to gas boilers, “cost about 10 grand a pop”. He added: “This is a lot of money for ordinary people. We’ve got to make sure that when we embark on this programme, that we have a solution that is affordable and that works for people. We won’t be imposing it until we have been able to create that market.”
There is alarm among some insiders about the amount of progress needed to achieve the net zero target by 2050. On the other hand, Mr Mackinlay’s group believe that, “while something sensible can emerge”, the current approach is “too rapid, too uncosted and too unscientific”.
Number 10 believes that the Government can encourage “early adopters” of such technologies with financial and regulatory incentives, with the hope that prices then fall as the market “takes off”. A similar approach was taken to the wind industry, which has benefited from generous consumer subsidies. “We need to drive down the cost of renewable energy,” a government source said.
But, last week, an industry analysis suggested that most wind farms in Britain will not be economically viable when existing subsidies end, primarily from the 2030s, and many could shut down prematurely without further support.
The Prime Minister believes that, while wind turbines are largely not produced in the UK, if Britain becomes a world leading manufacturer of electric heat pumps and producer of low carbon hydrogen, it can cash in on a “green jobs benefit to the UK as well as reducing emissions”.
Mr Sunak is said to agree on the need to bring down the cost of green technology but wants the private sector to “do most of the heavy lifting”. The free marketeer MP is thought to see interventions designed to encourage the market to bring down costs over time as “the best use of taxpayers’ money”. A source insisted that Mr Johnson was “in the same camp”.