Yahoo Finance Gas boiler manufacturers face £5,000 fines for missing heat pump targets
Boiler manufacturers will be fined thousands of pounds if they fail to install enough heat pumps under new net zero plans.
Ministers are planning to force production quotas onto large manufacturers as part of efforts to boost uptake of the devices across Britain.
Companies that fail to meet the quotas will face a fine of £5,000 per device. In an example given in consultation papers, a manufacturer with a shortfall of 100 would be expected to pay £500,000.
Heat pumps are seen as a key replacement for gas-fired boilers, which ministers want to phase out in order to cut carbon emissions.
However, Mike Foster, chief executive of trade group Energy and Utilities Alliance, said the quotas were “absurd” and politicians were “out of touch”.
Mr Foster said the “Soviet-style” quotas could force companies to import heat pumps to meet the targets.
He added: “If the public want to buy heat pumps, our members will sell them, that’s the basic law of demand and supply.”
It comes as ministers are planning to overhaul subsidy rules to make gas-fired boilers less attractive to households.
New gas boilers could also be banned within a decade, the Government revealed in its net zero strategy.
The Government said it would consider recommendations made by net zero tsar Chris Skidmore to ban new installations of the heating systems by 2033.
If adopted, the policy would mean households would need to install heat pumps or other low-carbon systems once their gas boiler breaks down.
Grant Shapps, the net zero secretary, yesterday said the policy was not a “rip-out-your-boiler moment”.
“This is a transition over a period of time to get to homes which are heated in a different way and also insulated much better,” he told Sky News.
Heat pumps are expected to be the main low-carbon replacement for domestic gas boilers, which are responsible for 14pc of the UK’s emissions.
The devices work by drawing warmth from the outside air and run on electricity, which can be generated cleanly.
However, uptake of heat pumps has been sluggish so far amid high costs and nervousness among consumers.
Only 42,779 heat pumps were installed in the UK last year. The Government wants 600,000 to be installed each year by 2028.
Other measures to encourage the switch in the new net zero plan include making gas heating more expensive compared to electricity by redistributing green levies on to the fossil fuel, and extending the £5,000 heat pump subsidy scheme.
Matt Copeland, from fuel charity National Energy Action, warned there was a risk that households could be left without heating if they were unable to afford a heat pump, which currently cost around £10,000.
He also warned that raising the cost of gas could leave some fuel poor households forced to ration their heating.
Mr Copeland said: “It won't necessarily incentivise moving to heat pumps, but what it would incentivise is them rationing their energy further and under-heating their homes.”
The Government’s refreshed net zero strategy, which includes more than 1,000 pages of updated policy, was released in response to the Skidmore review and a judicial review that found its original plan failed to say how it would deliver sufficient emissions cuts.
Friends of the Earth, one of the NGOs that brought the judicial review, said it was “ready to take legal action again” once it had been able to fully scrutinise the strategy.
Under plans set out on Thursday, ministers plan to oblige makers of heating appliances to sell a certain proportion of heat pumps each year.
They will earn “credits” for each heat pump installed, which will be used as proof they have met their heat pump targets. Under plans being considered, an initial 4pc of manufacturers’ sales above a 20,000 threshold will need to be heat pumps.
Manufacturers will be allowed to buy heat pump credits from rivals and defer some of the targets to the following year.
Mr Foster, at the Energy and Utilities Alliance, said the quotas for heat pump sales would force members to import heat pumps to avoid fines.
He said: “Confirmation that Whitehall is determined to introduce Soviet-style heat pump quotas for British boiler manufacturers simply 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.
“The plan to impose huge fines on British companies for selling the boilers that consumers want is simply absurd.”
Henk van Den Berg, strategic business manager for heat pump maker Daikin, welcomed the move.
He said: “We need a market that is super-competitive, with all heating manufacturers joining the battle to provide the best value for consumers.”
