New analysis from the Energy and Climate Intelligence Unit suggests the UK’s top gas boiler manufacturers could potentially make over £100 million by increasing boiler prices, despite government plans to shift consumers towards cleaner heat pumps.
The ECIU examined proposals by Worcester Bosch, Vaillant, Ideal and Baxi to charge homeowners an average of £110 more per gas boiler. This is purportedly to cover costs arising from the Government’s new Clean Heat Market Mechanism (CHMM).
Under this policy, which is scheduled to come into force in April, a target has been set of 60,000 heat pumps to be sold in the UK by March 2025 – around 4% of the 1.8 million gas boilers currently installed each year. As the top four firms collectively sell around 1.5 million gas boilers annually, they would need to boost heat pump sales to around 50,000 units combined over the next two years to meet their obligations.
The ECIU analysis suggests that by raising average boiler prices, the four leading suppliers stand to generate some £165 million in extra revenue each year – far exceeding potential penalties for missing heat pump sales quotas. Even if the firms only meet partial targets, they could still substantially profit, estimated at up to £115 million by 2025.
Meanwhile, consumers are facing the double blow of paying more for their new boilers and contending with Britain’s ongoing cost of living crisis.
Commenting on the analysis, Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit, says: “Gas boilers will increasingly be powered by foreign gas imports as the North Sea continues to decline, so if we’re to boost our energy independence the UK needs to shift to heat pumps that can run on renewable energy generated in the UK. Anyone slowing the heat pump rollout is leaving us less energy secure and at risk of higher bills as the gas price is notoriously volatile and set to remain high even after the last two years of high energy bills.
“The government has said that the gas boiler lobby is price gouging by increasing their boiler prices when they are likely to meet the required number of heat pump sales, raising the question, would the manufacturers pocket the so-called “boiler tax” that they have imposed? Their customers, families that may already be struggling during the cost-of-living crisis, wouldn’t thank them for that.”
