At Boiling Point: Why the ‘Boiler Tax’ isn’t the solution to the Clean Heat Market Mechanism

20 May 2024

The Clean Heat Market Mechanism (CHMM) has once again made headlines recently, as several leading boiler manufacturers are being forced to return the so-called ‘Boiler Tax’ added to their gas products, because of the CHMM delay.

From the start…

At the end of 2023 the Government seemingly cemented its commitment to the decarbonisation of domestic properties through the introduction of the Clean Heat Market Mechanism (CHMM).

The aim? To aid the government’s target of 600,000 heat pump installations per year by 2028.

Originally due to be implemented on 1 April 2024, the CHMM will require heating system manufacturers to ensure at least 4% of their sales are heat pumps rather than gas boilers, extending to 6% in the second year.

The penalty? A £3,000 fine per missed installation.

Cue panic amongst many other industry leading manufacturers who rapidly adjusted their pricing strategies for gas boilers, introducing the ‘Boiler Tax’ to prepare themselves for the inevitable fines they would incur, and to recoup some of that money through fossil fuel product sales.

At Alpha however, we didn’t add a boiler tax.

Firstly, we staunchly support the push for the decarbonisation of UK homes as a priority as we journey towards net zero, and secondly, we don’t believe those continuing to purchase gas boilers (for not all homes may be ‘heat pump ready’) should indirectly incur the penalty on the manufacturer’s behalf.

In order to collectively achieve net zero, and even more so the gas boiler ban in 2030, the focus must be on pushing the benefits and functionalities of renewable energy heating systems to installers and their customers, rather than simply charging more for gas products.

What has happened since?

In March 2024, two weeks before the supposed CHMM start date, the government postponed it by a year to 1 April 2025, citing that it must ‘continue to monitor market developments and the timeline for the introduction of formal measures’, such as the CHMM.

Given the last-minute delay, those manufacturers who did apply a boiler tax on their gas and oil products are now navigating the rocky path of returning that ‘tax’ to the customer via the distribution companies or installers. This doesn’t necessarily mean that the end-user will receive the rebate.

What about the future?

In amongst all of this, and despite the delay to the CHMM, at Alpha we are continuing to focus on the development of new, renewable products.

For us, the vital next step is to have hybrid heating systems included within both the CHMM and the Boiler Upgrade Scheme (which sees a £7,500 grant towards a heat pump install). Currently a hybrid counts for ½ a credit on the CHMM, but does not qualify for any BUS funding.

Potentially reducing an individual home’s carbon emissions by 80-90% and costing less than half that of a heat pump, we believe a hybrid system is the natural next step for many homeowners.

As a result, it leaves many homeowners in a state of not quite understanding the benefits of a heat pump and thus not willing to make such a significant investment. We believe the hybrid system can help to mend this disconnect, by introducing consumers to a heat pump whilst providing the comfort and familiarity of a gas boiler.

For further support and practical tips on the variety of home heating options available to you, please view our range of products.