EUA slams “market mechanism” boiler penalty

EUA slams “market mechanism” boiler penalty

Arguing that it is “time to stop the madness”, the Energy and Utilities Alliance (EUA) has lambasted a Government plan to fine boiler manufacturers under the  “market mechanism” scheme.

Facing a cost of living crisis and with energy bills soaring, Whitehall bureaucrats and their Minister Lord Callanan have devised what the EUA dismissively decries as “a cunning new plan”. Called the “market mechanism”, the EUA states the new scheme will penalise British boiler manufacturers if they do not fit heat pumps – even though the Government’s own climate change advisers acknowledge this will increase heating bills by an average of 10%.

Mike Foster, CEO of the not-for-profit trade association, said: “I can’t recall a more ridiculous policy than the so-called market mechanism. We have always said this smacks of Soviet-style planning, with bureaucrats telling industry what they must sell, regardless of what the consumer might want or can afford, and with huge financial penalties facing British businesses if they disobey Whitehall. But now it is even worse.

“It seems British gas boiler manufacturers will be heavily penalised if they sell a boiler rather than a heat pump, even though a boiler offers lower heating bills. So in the middle of a cost of living crisis successful and innovative British businesses are being forced to put consumers’ bills up by around £100 a year and literally fined if they don’t. You couldn’t make it up.”

Mike continued: “The Minister is not living in the real world. Energy bills are hurting consumers. People are forced to choose between eating and heating. They are rationing their own energy use. And along comes Lord Callanan fining British business if they help keep heating bills down. How is this consistent with the Prime Minister’s pledge to help ease the cost of living crisis?

“The policy is due to take effect in 2024. It will apply a penalty, a figure of £5,000 a time is mentioned, to sales of British-built boilers in favour of imported heat pumps; penalising businesses if they try and keep bills down, knowing consumers will be worse off with a heat pump and now it is time to stop this madcap plan.”

He added: “The UK heating industry has submitted alternative options to the Government and now they must decide whose side they are on, the consumer and British manufacturers or the energy suppliers and foreign importers.”

The EUA statment comes at a time when new research from Baxi suggests that “the transition to low carbon heating is at finely balanced tipping point with installers split on whether they will be installing heat pumps in their customers’ homes”.

Baxi’s research, which assesses what would encourage installers to take the leap to low carbon sources of heat, found that nearly a third – equivalent to about 37,000 of the more than 130,000 of the UK’s heating engineers – are prepared to embrace heat pumps in the near future. By contrast, around 30% say they are extremely unlikely to install heat pumps.

The government is targeting 600,000 heat pump installations every year by 2028. That is ten times the current market and represents a transformation from early adoption to a mass market proposition. It would require “an army of low carbon heating installers” to be assisting homeowners and encouraging to make the change.

Amongst the main findings in the report, entitled “Heating Installers: Taking the Leap to a Low Carbon Future”, are that the government and the industry will need to address the important issue of training costs, ensuring there is enough demand from customers and reducing paperwork.

On training costs for example, 39% said they would be more likely to install heat pumps if they received help with training costs. They currently pay the full cost of training and forgo work in order to receive heat pump training.

56% of installers, meanwhile, said customer demand needed to be addressed and 38% of installers revealed they are concerned about lack of government support for the market. For example, the current Boiler Upgrade Scheme which pays a max £5,000 grant to support air source heat pump installations ends in 2025.

In addition, 44% wanted support to reduce the burden of paperwork, for example in applying for government assistance schemes.

Karen Boswell, Managing Director of Baxi UK & Ireland, said: “Installers will play an important role as we decarbonise the nation’s heating and it will be vital that the government and industry support them with the right information, incentives and training.

“They will need to be advocates for low carbon sources of heat and recommend to the nation’s homeowners that they should make the leap to a heat pump. To achieve this, we will need to address their concerns, support them with training, and explain more clearly the financial and non-financial benefits of these appliances.”

Baxi’s report makes a series of recommendations which include spelling out stronger government initiatives that will drive demand for heat pumps over the coming decade; support for training costs on a first come-first served basis; and an industry wide campaign to market the role of a low carbon heating installer to attract new entrants.

For more information, and to download the report, click here

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