The Government is expected to scrap their so-called boiler tax for "at least a year", in an announcement coming as soon as next week.
Under the Clean Heat Market Mechanism, a fine of £3,000 was set to be levied against suppliers if they missed a target of selling one heat pump for every 24 gas boilers.
The scheme, which is meant to drive the take-up of heat pumps by four per cent, was due to start in April, however, the Department for Energy Security and Net Zero (DESNZ) is now expected to delay the start date by a year.
Claire Coutinho, the Energy Secretary, will not be proceeding with the policy, which would see the price of boilers increase by up to £120, the Telegraph has reported.
The Government is expected to scrap their so-called boiler tax for 'at least a year'PAThe plans, which had been criticised as a form of "Government coercion", have now been watered down and will no longer come into effect from April.
The 2024-2025 year will now be seen as a "monitoring year" where the Government tracks sales of heat pumps in relation to boilers.
The move is likely to come as good news to Conservative MPs, who had slammed the scheme.
Lord David Frost said: "Good news if confirmed. A very sensible stop on a wholly irrational policy. Well done to Claire Coutinho for sticking to her guns and facing down the opposition."
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Craig Mackinlay, the chair of the Net Zero Scrutiny Group of Tory MPs, wrote to Coutinho in February urging her to "trust your instincts and scrap this harmful policy", branding the scheme "Government coercion".
"Consumer choice has to be at the heart of a Conservative, free-market approach to Net Zero,” he said.
He claimed that "the targets and central planning inherent in the Clean Heat Market Mechanism" came "straight from the failed socialist playbook of the past".
"It was the right decision to review this policy," he said.
Claire Coutinho, the Energy Secretary, will not be proceeding with the policy
GETTY"We know that there are many siren voices encouraging you to impose the boiler tax. You must resist them and show the public you are on their side."
A DESNZ spokesman said: "No decision has yet been made and we remain committed to our ambition of installing 600,000 heat pumps a year by 2028.
"We want to do this in a way that does not burden consumers and we’ve increased our heat pump grants by 50 per cent to £7,500 – making it one of the most generous schemes in Europe.
"This pragmatic approach is working, with a nearly 40 per cent increase in people applying in January 2024 compared to the same month in 2023."
In December, Katherine McBryan, a fellow at the Centre for Brexit Policy spoke to Martin Daubney on GB News about the tax.
She said: "It is crazy, I don't know where the Government thinks companies get their money from but their only pool of money is their customers.
"To fine them for not selling a product, which quite frankly people do not want, is ridiculous."