Proactive Investors - The UK is set to withdraw support for heat pumps and shelve an associated 'boiler tax' as the government struggles to balance environmental initiatives with heel-dragging from the industry.
Boiler manufacturers have found a simple work-around to cope with rules that are due to start in April, hiking prices of new gas boilers to cover potential fines.
Under the proposed Clean Heat Market Mechanism (CHMM) rules, boiler companies need to install heat pumps equivalent to 4% of their boiler sales or face a fine of £3,000 for every installation below this.
But the industry has been lobbying the government, calling for a delay or total scrapping of the policy, according to reports in the Financial Times and Sunday Times.
The government's target is for 600,000 heat pumps to be installed each year by 2028, compared to fewer than 60,000 installations in 2021.
The quotas are not realistic, the industry argues, as demand for heat pumps is not sufficient while also being exacerbated by a shortage of installation specialists.
Energy secretary Claire Coutinho in December, alongside committing £1.5 billion of extra funding to the boiler upgrade scheme, accused the companies of “price gouging” and Downing Street sources reiterated to the papers that the government is calling for manufacturers to "do the right thing" and remove the "indefensible" price hikes.
Both papers said the government is poised to abandon the targets and fines, which marks another step back from the UK's net-zero policies.
Last year, prime minister Rishi Sunak pushed back the deadline for the phase-out of sales of petrol and diesel cars and vans by five years to 2035, calling the decision "pragmatic and proportionate".
If the government withdraws the scheme, it shows a “willingness to cave in to gas industry blackmail”, said Greenpeace UK’s chief scientist Doug Parr.
The Association for Decentralised Energy’s senior policy manager Chris Friedler said it would represent "a big backwards step on the path to low carbon heating".
“While plans change and households must be protected from costs being passed-on, this raises the big question of what the Plan B for getting Britain off gas really looks like," Friedler said. "Extraordinary targets require extraordinary policies, and if the Clean Heat Mechanism isn’t it, a more acceptable backup plan is needed – fast."