Combine solar panels with heat pumps to make finances stack up, says building society chief

Paul Denton said the Scottish Government pausing its Heat in Buildings legislation “was not exclusively bad news”, and offered a chance to change course.

Writing in Scotland on Sunday, he said the key was convincing the public of the benefits in terms of their finances, and a solution would be to combine with solar panel and battery installation.

“Heat pumps are, as we know, three-or-four times more efficient than gas boilers. However they are powered by electricity, and the structure of our energy market therefore makes them up to five times more expensive to power. Add to that the upfront cost of installing them, and the financial calculation becomes problematic.

“It is this calculation which makes solar panels, combined with storage batteries, a more attractive prospect. They cost less to install, and immediately offer a return in the form of cheaper electricity bills. They do not heat the home, of course, but they make the installation of a heat pump significantly more attractive, because they enable the heat pump to be powered by ‘free’ electricity rather than by power bought at peak time from the grid.

“As a lender, this is a proposition we can put our arms around.”

He adds: “It is also unrealistic to expect homeowners to green their homes from their own savings. Around one-third of Scots have no savings at all. Instead, it is the country’s mortgage lenders who can fund Scotland’s national decarbonisation. The government (and its voters) will inevitably be unwilling. Homeowners will inevitably be unable. But lenders are both willing and able to play our role in this national endeavour.

“However, first, we have to be asked. And that is our current problem in a nutshell. We are funding very little in the way of decarbonisation, because we are not being asked.”