The Heating and Hot Water Industry Council (HHIC) says that the government should put an end to the proposed Clean Heat Market Mechanism, with the second consultation set to close on 8 June.
The policy seeks to fine boiler manufacturers £5000 for every gas boiler sold over a certain quota compared to their heat pump sales in an attempt to kickstart demand for heat pumps in the UK, but there is concern from manufacturers about the difficulty in changing consumer behaviour and many have labelled the proposal as fundamentally flawed.
Commenting on the implications of the proposal, Stewart Clements, director of the HHIC, says: “We are urging the government to throw out this out of touch policy before it impacts the industry irreparably. This policy is meant to kick-start the heat pump market but the truth of the matter is, this won’t change anything around demand of heat pumps or gas boilers because demand comes from what people want to buy – not what manufacturers make.
“We need to address other challenges before we start trying to flood the market with heat pumps. Consumers need to be supported in understanding the efficiency benefits of heat pumps when installed in a suitable home and know what grants are available to support with the cost. Without this, there will simply be no demand.”
The HHIC also points out that many more heat pump trained engineers will be needed for the government to reach its targets. It is estimated that there are currently around 3000 heat pump trained installers in the UK, yet the HHIC says that the number needed is closer to 150,000.
“Rather than punish the manufacturers, the Government needs to focus on incentivising training so engineers are ready for when demand from consumers grows,” adds Clements.
“A final way to start a transition to a more buoyant heat pump market would be for the Government to incentivise hybrid systems as more of a stop gap solution to get consumers and engineers more used to the technology. However, grants like the Boiler Upgrade Scheme (BUS) not including hybrid systems once again prevents uptake from consumers in the UK. If hybrid systems and heat pumps were to become more financially viable for homeowners through further grants and incentives, the market will be more likely to pick up.”
The Energy and Utilities Alliance has also been heavily critical of the Market Mechanism, with CEO Mike Foster branding the proposal as “out of touch” and “absurd”. It is claimed that its implementation would see the industry having to recoup its losses by ramping up prices of a boiler, thereby heaping more misery on consumers and pushing up inflation.
Mike Foster explains: “Punishing manufacturers for selling the boilers that consumers want to buy is simply irrational, and by doing so, manufacturers may be left with no choice but to raise prices. If the public truly want to buy heat pumps, our members will sell them – that’s the basic law of demand and supply. Instead, this absurd, Soviet-style production quota will force our members to import heat pumps into the UK, to avoid a fine and that’s at the expense of a British-built boiler.
“The stark reality of a plan to impose huge fines on British companies is that the jobs of British workers will be sacrificed, as manufacturers rely on cheap import units made in the EU and further afield. The Whitehall obsession with this Market Mechanism reaffirms our view. They are simply out of touch with the public, they do not understand even basic economics and frankly, they don’t care about the jobs of British workers.”
