UK Heat Pump Mandate May Increase Boiler Costs in 2025
Ministers plan to implement heat pump sales targets next year, potentially leading to higher boiler prices. Industry sources claim the policy will proceed, despite concerns over consumer impact.
The UK government is poised to introduce heat pump targets in April 2025, a move that could result in increased boiler prices for consumers. Industry sources indicate that Ed Miliband, the Energy Secretary, is expected to implement the Clean Heat Market Mechanism (CHMM), despite concerns about its potential impact on household expenses.
Under the proposed scheme, boiler manufacturers would face substantial fines if they fail to meet specified heat pump sales targets. This policy, initially developed by the previous administration, aims to promote the adoption of more environmentally friendly heating solutions. Heat pumps can reduce carbon emissions by up to 60% compared to traditional gas boilers, aligning with the UK's climate goals.
The CHMM would require manufacturers to ensure that at least 6% of their total sales consist of heat pumps. Failure to meet this target could result in a £3,000 fine per missed sale. Industry insiders warn that these penalties might be passed on to consumers, potentially adding up to £180 to the cost of a new boiler.
"Ministers and officials have been engaged with the boiler manufacturers with a view to bringing the CHMM in in 2025. What hasn't yet been finalised are the details around the size of the fine."
Critics argue that the demand for heat pumps, which are significantly more expensive than traditional boilers, may not be sufficient to meet the proposed targets. In 2024, fewer than 37,000 certified heat pump installations were recorded, far short of the 90,000 required to meet a 6% target. This discrepancy raises concerns about the feasibility of the policy and its potential impact on both manufacturers and consumers.
The UK government has set an ambitious target of installing 600,000 heat pumps per year by 2028. To support this goal, grants of up to £5,000 are available for air source heat pump installations. However, with the average cost of installing a heat pump ranging between £7,000 and £13,000, affordability remains a significant barrier for many households.
Some environmental groups have accused boiler manufacturers of using the policy as an excuse for "price gouging." They argue that the transition to heat pumps is crucial for energy security and reducing reliance on imported gas. The global heat pump market is expected to reach $84 billion by 2028, reflecting the growing importance of this technology in addressing climate change.
As the debate continues, the Department of Energy and Climate Change emphasizes the need to upgrade British homes and secure energy independence. The government's forthcoming Warm Homes Plan is expected to outline various measures to support low-carbon heating, including heat pumps, while aiming to protect bill-payers and reduce fuel poverty.
