The current subsidy system has just £450m of funding, covering the cost of only 90,000 homes, but the Climate Change Committee, the Government’s climate watchdog, says 600,000 heat pumps will need to be installed every year by 2028 in order to hit net zero targets.
However, expanding the scheme would be costly to the taxpayer so Mr Miliband said Labour is exploring ways to bridge the finance gap and sharply accelerate heat pump installations, as well as trying to build public confidence in low carbon technologies.
Alongside extending subsidies, Labour plans to back the creation of green mortgages, which could see homes granted more favourable rates for putting in insulation or heat pumps. Other ideas have included changes to stamp duty or council tax to reward householders who install energy saving or emission reduction measures.
Labour has also committed to doubling the current funding for green homes with an extra £6.6bn, including schemes to upgrade insulation in draughty homes, the installation of solar panels and home batteries.
The party will also reintroduce requirements for all landlords to upgrade energy efficiency to at least the level of an Energy Performance Certificate C by 2028, a pledge that was abandoned by the Tory party.
The Conservatives have not yet put forward legislation on the 2035 date, meaning Labour would not have to scrap any existing laws, and the party has not ruled out introducing a ban in the future.
A key vehicle for Mr Miliband’s plans will be Great British Energy which will use £8bn harvested from taxing the UK’s offshore oil and gas industry to invest in green technologies – especially riskier ones such as tidal projects and floating wind.
Labour’s planned windfall tax on oil and gas producers has come under heavy criticism, with Sir Jim Ratcliffe last week saying the proposals will tax the North Sea “out of existence”.
Analysts at Stifel have also suggested that it could raise as much as £2bn less than claimed by Labour, leaving a hole in their finances.
About £3.3bn of the Great British Energy fund will be offered to local communities as loans or grants to support locally-owned power projects such as wind or solar farms. Mr Miliband said: “Our local power plan will work with local communities and local authorities in two different ways.
“First, it will have clean power projects that local communities can get direct benefit from – potentially lowering bills. And the proceeds [profits] will also go back to local communities. The idea is that Great British Energy will invest to give a direct stake to local people.”
Earlier this month Mr Miliband visited a factory for ground source heat pumps in Cornwall, during which he said they were a “crucial technology” on the road to net zero.