The Government aims to install 600,000 heat pumps a year from 2028 as gas heating is phased out. That is, it plans that the public will pay for and install these in their homes. This is not going well despite a recent increase in grants being offered. This could be because of continuing public scepticism about the efficacy of heat pumps and, of course, their cost.
Don’t despair though. Rules will be in place from next April to further incentivise installations through a Clean Heat Market Mechanism (CHMM) whereby manufacturers are to have government enforced heat pump sales quotas. If they undershoot these quotas they will be fined £3,000 for every heat pump not sold. The Telegraph has details of the rules for heat pump installations. What could possibly go wrong?
I've been aware of the CHMM shift since last Summer and have been waiting for its perverse quirks to become clear as they now have.
As all the installers already know that they will not meet the heat pump quotas because of the lack of demand, and will likely have to pay the £3000 fines, they have all raised the prices of gas boilers to cover the amount of CHMM tax they think they will need to pay. This money will go to the Treasury. Thus a fine on the company becomes a tax on the consumer.
Meanwhile, the Department for Energy Security and Net Zero said:
“We have not required any increase to the price of gas boilers. Targets are realistic and fully achievable, providing industry with flexible options to support our ambition to make heat pumps easy and affordable to install."
Indeed. Government is probably quite happy at all this as it further disincentivises gas boiler buying and they get to blame industry. Win – Win as they say in Whitehall.
We can expect to see more of these stealth tax rises when the public is increasingly nudged along the net zero road by the next government. I'm told that they will adopt a carrot 'n' stick approach which boils down to hitting us with the carrot. Fun it will not be.
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