Heat pumps spark 'boiler tax' - warning to Britons as prices hiked by £120 next year

Heat pumps spark 'boiler tax' - warning to Britons as prices hiked by £120 next year
Dan Falvey

By Dan Falvey

Published: 16/12/2023

- 09:26

Manufacturers blame the Government for the huge price increases for gas boilers

Britons looking to replace their boilers risk being slapped with a new "green tax" as manufacturers look to try and offset the cost of heat pumps.

Multiple boiler manufacturers have confirmed they will hike their prices up in the new year as a result of the Government's net zero plans.

The Government wants 600,000 heat pumps a year to be installed by 2028. Companies which fail to meet mandated quotes from the Department for Energy Security and Net Zero risk being fined.

It has led to manufacturers warning they will need to increase the price of gas boilers in order to cover the cost of fines should they miss the target.

Gas boilerGas boilers will go up in price next year PA

Worcester Bosch, which has announced plans to increase prices by £120, said that the Government's targets were "clearly unachievable within the timescales allowed".

It warned that manufacturers would be left with no choice but to "pass these fines onto the market in the form of a CHMM levy".

"Worcester Bosch will not benefit in any way and interestingly, neither will market growth for heat pumps as the revenue raised from the fines will go to the Treasury and not be used to grow demand for heat pumps," a spokesman said.

"This does, however, support the Government’s overall goal of closing the price gap between a gas boiler and heat pump installation."

Heat pump

The Government wants 600,000 heat pumps a year to be installed by 2028


Meanwhile, leading manufacturer Baxi - which also plans a £120 price hike - said: "This levy is not a price increase, but a direct impact of the CHMM on our business, which we will use as payment to the Government for the penalty they award us for not meeting its 4pc target.”

Vaillant is similar increasing prices, imposing an extra £95 on the price of its boilers.

A spokesman said: "There are multiple factors announced by the Government that will impact Vaillant. The current process does not allow manufacturers the full visibility of how many heat pumps sold are MCS registered.

"Given the changing market dynamics and push for heat pump installations generated by CHMM, we in the current circumstances are left with no option but to act."

The Government has already announced that it is considering complaining to the Competition and Market Authority.

It has accused manufacturers of unfairly blamining net zero for the price hikes and claims that the new levies are far higher than necessary to cover costs.

A Department for Energy Security and Net Zero spokesman 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.

“This is alongside making it easier to get a heat pump by increasing the Boiler Upgrade Scheme by 50 per cent to £7,500 – tripling applications in the week after it was rolled out.”

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