Gas boiler manufacturers in the UK are poised to profit substantially from what’s being dubbed as the “boiler tax.”
Analysis from the Energy and Climate Intelligence Unit (ECIU) suggests that the top four manufacturers could make nearly £100 million by increasing prices by an average of £110 per boiler.
This move is purportedly to cover potential penalties for not meeting required heat pump sales targets under the government’s Clean Heat Market Mechanism (CHMM).
The CHMM, slated for implementation from 1st April, mandates gas boiler manufacturers to sell a growing proportion of heat pumps alongside gas boilers.
In the upcoming year, manufacturers collectively must sell around 50,000 heat pumps, a fraction of the 1.8 million gas boilers sold annually.
While the CHMM aims to promote the adoption of heat pumps and create a mass market, the analysis suggests that gas boiler firms could exploit the situation to inflate prices and reap profits from the so-called “boiler tax.”
Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit, said: “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.”
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