A ‘boiler tax’ could be scrapped by the Energy Secretary due to manufacturers imposing ‘indefensible price hikes’ on customers.
An incentive, known as the Clean Heat Market Mechanism (CHMM), was introduced to speed up the phasing out of gas boilers – offering customers up to £7,500 to make the switch to heat pumps.
Boiler manufacturers are required to match at least four per cent of all sales with heat pumps and those who missed heat pump installation targets were set to be fined from April this year.
But manufacturers have already responded by raising their prices by up to £120 and there are concerns about companies passing the costs of future fines onto consumers.
The aim of the scheme is to lower the UK’s carbon emissions and increase the energy efficiency of households.
Energy Secretary Claire Coutinho (pictured) held discussions with her officials in recent weeks about scrapping the tax, The Times reported
The government has already announced that it is backing down on some Net Zero policies, such as the plan to ban the installation of new gas boilers (stock photo)
A government target is to add 600,000 pumps a year by the year 2028, which they are said to be still committed to.
Although no final decision has been made, a government source quoted by The Times said ministers were ‘looking again at the policy’ as they accused boiler manufacturers of imposing ‘indefensible price hikes’.
Energy Secretary Claire Coutinho held discussions with her officials in recent weeks about scrapping the tax, The Times reported.
Ms Coutinho accused the firms of ‘price gouging’ and said there was no evidence they would not be able to hit their heat pump targets.
Sources at the Department for Energy Security and Net Zero said the minister’s priority was to help families make environmentally friendly changes instead of forcing them to.
It comes amid a backlash across mainland Europe against draconian net zero policies with farmers taking to the streets in France, Belgium and Germany.
A department source said they did not want to see the same thing happening in the UK.
The government has already announced that it is backing down on some net zero policies, such as the plan to ban the installation of new gas boilers.
When the so-called ‘boiler tax’ was announced last year, Worcester Bosch said the price of all its gas boilers would increase by £120.
Getting a boiler fitted typically costs between £1,500 and £5,000, depending on the size and type required.
To encourage homeowners to make the switch, the Government offers Boiler Upgrade Scheme grants of up to £7,500 to get a heat pump.
A spokesman for the Department for Energy Security & Net Zero said: ‘We remain committed to our ambition of installing 600,000 heat pumps a year by 2028.
The aim of the scheme is to lower the UK’s carbon emissions and increase the energy efficiency of households by encouraging more heat pump installations (stock photo of a heat pump)
When the so-called ‘boiler tax’ was announced last year, Worcester Bosch said the price of all its gas boilers would increase by £120 (stock photo)
‘We want to do this in a way that does not burden consumers and we’ve increased our heat pump grants by 50 per cent to £7,500 – making it one of the most generous schemes in Europe.
‘This pragmatic approach is working, with a nearly 50 per cent increase in people applying in December 2023 compared to the same month in 2022.’
Mel Butler, founder of boiler fitter Boxt, said: ‘Whilst the move to cleaner heating in the UK is something we are absolutely supportive of, the people who are ultimately paying with this policy are homeowners.
‘Our worry is that this will create a substantial financial barrier for some homeowners and could result in them opting for a less efficient or reliable boiler with a shorter warranty to help reduce the initial outlay, but is likely to ultimately cost them more in the long run in maintenance, repairs, and potentially having to replace it again sooner.’