Households replacing a gas boiler will face a boiler tax of up to £120
- Companies that make boilers and heat pumps are introducing new rates this year
- The cost of up to £120 per new boiler will cover expected government fines
Households will have to pay a ‘boiler tax’ of up to £120 when they buy a new one, as manufacturers believe they will miss targets for installing heat pumps.
From April, the government will fine boiler and heat pump manufacturers if they do not install enough heat pumps.
But these manufacturers already believe they will miss these targets, and say they will have to increase boiler costs in response – with some already charging consumers extra.
The government’s Clean Heat Market Mechanism (CHMM) gives every manufacturer of gas and oil boilers credits for installing a certain number of heat pumps per year.
Away with the old: if you have a new gas boiler installed this year, this may mean that you have to pay extra
The government is expected to say heat pump installations will account for 4 percent of companies’ boiler sales by 2024/25, rising to 6 percent by 2025/26.
If manufacturers do not meet their individual targets, they face fines of £3,000 per missing credit.
The aim of the scheme is to reduce CO2 emissions in Britain and increase household energy efficiency by encouraging more heat pump installations.
But boiler manufacturers such as Baxi, Ideal, Worcester Bosch and Vaillant have said they will have to pass on the cost of these fines to consumers in the form of higher prices for boiler installations.
Vaillant said the price of its boilers would increase by £95, Ideal’s prices by £110 and the cost of Baxi and Worcester Bosch boilers by £120.
Installing a boiler usually costs between €1,500 and €5,000, depending on the desired size and type.
To encourage homeowners to make the switch, the government is offering boiler upgrade grants of up to £7,500 towards the purchase of a heat pump.
The government has previously criticized the way boiler and heat pump manufacturers pass on the expected costs of future fines.
In with the new: Houses are being encouraged by the government to make more use of heat pumps
A spokesperson for the Department for Energy Security & Net Zero said: ‘We do not impose a boiler tax and any suggestion otherwise is completely inaccurate. We’ve looked at manufacturers’ numbers and don’t recognize the reason they’re imposing these costs on hardworking families.
“The targets under the CHMM are realistic and achievable, and manufacturers have failed to recognize that they can carry over up to 35 percent of their heat pump targets under the program to the following year.
‘We’ve also made it easier to get a heat pump by increasing the Boiler Upgrade Scheme grant by 50 per cent to £7,500 – a tripling of applications in the week after the scheme was rolled out.’
Mel Butler, founder of boilerfitter Boxt, said: ‘While the move to cleaner heating in the UK is something we absolutely support, the people ultimately paying for this policy are homeowners.
‘Our concern is that this will create a substantial financial barrier for some homeowners and could lead them to opt for a less efficient or reliable boiler with a shorter warranty to reduce initial costs, but will benefit them in the long run will probably cost more. maintenance and repairs are required and may need to be replaced more quickly.’
Baxi, Ideal, Worcester Bosch and Vaillant did not comment.