The Government's so-called boiler tax has been declared "socially unfair" as families face higher energy bills under the Net Zero policy.
Labour's flagship Clean Heat Market Mechanism (CHMM) is failing to deliver on its core objective, with heat pump installations actually declining since the policy took effect in April 2025, according to fresh analysis of official figures.
The scheme, which imposes penalties on boiler manufacturers who fail to meet heat pump sales targets, has instead resulted in higher costs for households through what critics have dubbed the "boiler tax."
Government-recognised MCS installation data reveal that more heat pumps were fitted in the twelve months before the CHMM launched than in the year since its introduction.
The Government's boiler tax has been slammed as 'socially unfair'
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Under the scheme, manufacturers who miss the Government-set heat pump targets face fines that are distributed across all boiler sales.
This translates into an additional charge of approximately £27 per unit when the scheme began, now increased to £36 as ministers raised targets despite falling installation numbers.
With roughly 1.5 million households replacing their boilers each year, the mechanism is now extracting tens of millions of pounds from families, the vast majority of whom will never install a heat pump.
Mike Foster, CEO of the EUA, said: "Instead of stimulating demand, the CHMM has delivered higher costs with declining installations, the opposite of what Ministers promised. A tax on boilers that does not deliver heat pumps."
There has been a significant ramping up of heat pump installations in the UK | GETTYLATEST DEVELOPMENTS
Experts are warning about the "boiler tax" but is a tax worth paying? | GETTY The underlying economics render heat pumps financially impractical for most households, a reality the Government has refused to acknowledge.
Current MCS data show the average heat pump installation costs £13,700, compared with around £2,500 for a standard gas boiler replacement. Even with the £7,500 Boiler Upgrade Scheme grant, homeowners must still find £6,200 from their own pockets.
Mr Foster added: "Even after the full subsidy, households still face thousands of pounds in additional costs, alongside disruption and energy bill uncertainty. It is therefore no surprise that forcing manufacturers to sell heat pumps does not force households to buy them."
Despite missing its own heat pump sales targets in 2025-26, the Government has opted to increase targets for the following year rather than reassess the policy, automatically pushing penalties and the boiler tax higher still.
Energy bills could soar later this year | GETTY Mr Foster described the approach as punishing consumers for government failure whilst ignoring fundamental weaknesses in the heat pump market.
"The Clean Heat Market Mechanism is economically illiterate, socially unfair, and politically reckless," he said, calling for the scheme to be scrapped immediately.
He warned that persisting with a failed policy would not achieve net zero but would instead deepen public resistance and erode trust in the transition to low-carbon heating.