Underground technology could provide energy for one in 10 homes

An innovative geothermal technology could by 2020 provide heat to one in 10 British homes and around 40 per cent of commercial buildings, according to a major study from the Environment Agency.

The report predicts that with the market for Ground Source Heat Pumps (GSHPs) already doubling last year, the introduction of new government incentives from 2012 could drive the technology into the mainstream, ensuring that the pumps meet about a third of the UK's renewable heat targets.

GSHPs are a relatively simple technology that uses a system of underground coiled loops to transfer heat from the ground into buildings. They can also be adapted to heat water and help cool buildings through air conditioning systems.

The technology is not zero carbon as some electricity is required to drive the pump, but according to industry estimates they are about four times more efficient than oil and gas boilers and six times more efficient than air conditioning units, resulting in average household energy bill savings of about £1,000 a year.

The technology also offers one of the most attractive returns on investment of any low carbon technology and as a result the Environment Agency report found that the number of GSHP systems installed in the last year has doubled to 8,000 pumps.

The report argued that the sector could enjoy rapid growth over the next decade, assuming the government structures its Renewable Heat Incentive feed-in tariff scheme to ensure the payments offered to businesses and households installing the technology are attractive enough.

"Ground source heating is a rapidly growing technology that has the potential to produce at least 30 per cent of the country's renewable heat needs, but it needs financial support in order to grow," said Tony Grayling, head of climate change and sustainable development at the Environment Agency. "We would like to see this technology given adequate financial support through the new renewable heat incentive to meet its full potential in the UK."

The report predicted that under a low growth scenario, 320,000 GSHPs will be installed by 2020 in one per cent of homes and 11 per cent of commercial buildings. However, it added that more generous incentives could result in 1.2 million GSHP units being installed, heating 11 per cent of homes and 40 per cent of commercial buildings.