The so-called “boiler tax” has been postponed ahead of its launch amid concern the levy could rise to £200 by 2025.
Boiler manufacturers would be forced to sell more heat pumps under the scheme as part of the Government’s wider net zero policy.
Under the clean heat market mechanism, manufacturers would have had to make sure four per cent of their sales this year came from heat pumps or be hit with a fine.
Recently, there has been a growing concern that boiler makers will pass on this cost to customers with experts claiming energy costs could jump by up to £120 a year.
Yesterday, Energy Secretary Claire Coutinho confirmed the scheme will be postponed by a year despite opposition from her own party.
Climate Minister Graham Stuart has previously threatened to resign if the scheme was crapped with Lord Callahan citing the initiative as essential to the Government in hitting green targets.
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The dreaded “boiler tax” has been delayed mere weeks before its expected launch
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In a letter to the Competition and Markets Authority (CMA), Coutinho urged the regulator to investigate the boiler market to examine the validity of concerns.
Manufacturers have already raised boiler prices to factor in fines that may not be implemented for least another year.
The country’s biggest boiler manufacturer, Worcester Bosch, has previously told consumers it would add £120 to the price of each boiler from January of this year.
As well as the “boiler tax” being delays, environmentalist are questioning whether the Government will be able to meet its target of 600,000 heat pump installations annually by 2028.
However, a Government source told The Times: “Claire’s priority is to make sure people who don’t yet have an alternative to a gas boiler aren’t being punished.
“She’s always fought hard to make sure we are helping people, not forcing them. The extra time also gives British suppliers time to grow.”
The U-turn has been met with criticism from net zero campaigners and consumer rights organisations who described the Government’s policy change as “disappointing”.
Helena Bennett, the head of climate policy at Green Alliance explained: “The building sector is in serious jeopardy of not meeting its net-zero targets, and this is only causing further setbacks.”
Regulatory Assistance Project’s Richard Lowes noted there will be less investing in heat pump manufacturing as a result of the uncertainty.
Amid rising energy bills, heat pumps have been promoted as a way of the UK to reduce costs and meet its net zero targets.
Despite the scheme being delayed, Though the scheme has been postponed, boiler manufacturers will have to hit a target of 6 per cent of sales being heat pumps in 2025.
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After this year, the proportion of heat pump sales will increase annually to encourage greater adoption of the devise.
The Government’s announcement of the scheme being postponed by a year was welcomed by representatives of the gas boiler industry.
Mike Foster, the chief executive of the Energy and Utilities Alliances, warned that the Conservatives has “set a trap” for the likely incoming Labour administration.
According to Foster, the so-called “boiler tax” will likely be sitting at around £200 as of next year.
