The Government is planning to scrap what has become known as the boiler tax and could announce their intention to do so as soon as this week, according to the Sunday Telegraph.
Energy Secretary Claire Coutinho is set to ditch the policy, which has been criticised for driving up gas boiler prices and has been branded “government coercion”.
The Clean Heat Market Mechanism requires producers to match or substitute 4 percent of their boiler sales with heat pumps. Fail to do so and companies are fined £3000 for every installation they fall short by.
The scheme was planned to start in April, however it now appears to be on the rocks. From April 2025 the target was set to rise to 6 percent.
Firms complained that the plan could make them put their boiler prices up by up to £120.
According to The Telegraph, the Department for Energy Security and Net Zero (DESNZ) is planning to reveal that the scheme will not be being introduced with the fines for at least its first 12 months.
Ministers were required to lay out a Statutory Instrument by next month to provide the legal powers to put in place the quotas. However, this is not expected to go ahead.
Now 2024-25 will be used as a “monitoring year” where the Government measures sales of heat pumps in comparison to ordinary boilers.
Those on the Tory Right are likely to welcome the move. Craig Mackinlay, who chairs the Net Zero Scrutiny Group of Conservative MPs, penned a message to Ms Countinho last month in which he urged her to follow her “instincts” and “scrap this harmful policy”. He termed it “Government coercion”.
He said: “Consumer choice has to be at the heart of a Conservative, free-market approach to Net Zero”.
And added that “the targets and central planning inherent in the Clean Heat Market Mechanism” are taken “straight from the failed socialist playbook of the past”.
He went on to say: “It was the right decision to review this policy. We know that there are many siren voices encouraging you to impose the boiler tax. You must resist them and show the public you are on their side.”
A DESNZ spokesman said: “No decision has yet been made and we remain committed to our ambition of installing 600,000 heat pumps a year by 2028.
“We want to do this in a way that does not burden consumers and we’ve increased our heat pump grants by 50 percent to £7,500 – making it one of the most generous schemes in Europe.
“This pragmatic approach is working, with a nearly 40 percent increase in people applying in January 2024 compared to the same month in 2023.”
