UK Pushes Back Heat Pump Policy as Boiler Companies Raise Prices

(Bloomberg) -- The UK government is delaying plans to require boiler companies to sell a minimum number of heat pumps, the latest in a series of rollbacks to net zero measures.

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The policy, which would have given boiler manufacturers a quota of heat pumps to install from this April or face financial penalties, has been pushed back by a year, the UK’s Department for Energy Security and Net Zero said on Thursday, after boiler companies increased their prices. The government said it had made the change to “protect consumers.”

Claire Coutinho, the energy security secretary, also urged the UK’s competition regulator, the Competition and Markets Authority, to review the boiler industry, which is dominated by four manufacturers, to ensure it is offering good value to consumers. Last year she accused companies of “price gouging” after they announced price increases on their products at the start of this year in anticipation of the levy.

The move is the latest in a series of delays and cancellations to environmental policy by the UK government, which has cited concerns about the cost to the consumer. Plans to replace gas boilers with highly efficient electric heat pumps are central to its plans to reduce carbon emissions from buildings, which currently make up a quarter of the UK’s total greenhouse gas emissions.

Companies will still have to match 6% of their boiler sales with heat pump sales from April next year, the same level as previously planned. Previous reports had suggested the policy might be scrapped altogether, but earlier this month Lord Callanan, minister for energy efficiency, said that it was an “essential part” of meeting the government’s target of installing 600,000 heat pumps a year by 2028.

David Cowdrey, director of external affairs at the MCS Foundation, a charity that oversees the standards governing heat pump installations in homes, said those targets were now in “serious jeopardy.”“The government needs to immediately set out plans for how it intends to fill the huge gap in heat pump plans that they have just created,’’ Cowdrey said. “We need clear and consistent policy more than anything.”

Juliet Phillips, program leader for energy at environmental think-tank E3G, said: “The government must move ahead with laying the legislation as soon as possible – without this, there will be continued speculation that the mechanism has been quietly killed.”

The government also said it was loosening restrictions on its program of subsidies for householders looking to install a heat pump. A £7,500 grant can now be claimed even if a householder does not have loft and cavity wall insulation – previously a requirement to be able to claim the money.

“We’ve already supported families by making our boiler upgrade scheme one of the most generous in Europe and now we’re making heat pumps even cheaper and easier to install,” Coutinho said in a statement.

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