The government has delayed by a year its scheme for spurring the take-up of heat pumps, under pressure from the gas boiler industry.
The clean heat market mechanism is intended to force heating installers to fit more low-carbon heat pumps, to meet the UK’s net zero greenhouse gas emissions target and save energy.
But the scheme – which requires companies to install a gradually increasing proportion of heat pumps compared with the number of gas boiler installations or face a financial penalty – was inaccurately described as a “boiler tax” by gas heating companies and their lobbyists. Some boiler companies put their prices up by £120, which they said was in reaction to the potential scheme, but which one government insider told the Guardian was unfair price “gouging”.
The mechanism was due to come in this April but has been delayed to April 2025, the government said on Thursday. The energy secretary, Claire Coutinho, has also asked the Competition and Markets Authority to investigate the boiler market.
Reforms to the boiler upgrade scheme also announced on Thursday will mean households no longer need to upgrade their insulation to take advantage of government heat pump grants. Removing the requirement for cavity wall and loft insulation should save consumers about £2,500 on a heat pump installation, for which the government is offering a £7,500 grant.
Heat pumps can cost up to £14,000, but cheaper models are rapidly coming on to the market. Radiators generally run at lower temperatures with heat pumps than with boilers, so homeowners are encouraged to have insulation fitted too, which also reduces emissions, but increases the cost of installation.
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Coutinho, who earlier this week called for new gas-fired power generation, said: “We’ve already supported families by making our boiler upgrade scheme one of the most generous in Europe, and now we’re making heat pumps even cheaper and easier to install. This is all part of our wider plan to ensure we cut our emissions and make homes more energy efficient without burdening families with high costs.”
Juliet Phillips, an analyst at the E3G thinktank, welcomed aspects of the strategy but urged the government to move faster. “The government must move ahead with laying the legislation as soon as possible – without this, there will be continued speculation that the mechanism has been quietly killed,” she said.
David Cowdrey, director of external affairs at the MCS Foundation, a charity that works on low-carbon homes, said: “It is extremely disappointing to see that the government has postponed one of the most important policies for getting the UK off fossil fuel heating. The clean heat market mechanism is crucial to the rollout of heat pumps, which are the only viable option to decarbonising at scale the 17% of UK emissions that are created by heating our homes.”
He added: “The government needs to immediately set out plans for how it intends to fill the huge gap in heat pump plans that they have just created. We need clear and consistent policy more than anything, and without that the UK’s target of installing 600,000 heat pumps a year by 2028 is in serious jeopardy.”
