Mike Foster, chief executive of the Energy and Utilities Alliance (EUA)
The policy penalises boiler manufacturers for failing to meet Whitehall-set targets for accredited heat pump sales. In practice, these fines are passed directly on to consumers buying a new gas boiler, increasing costs for households at the point they replace their heating system.
Around 1.5 million households are expected to replace a boiler in the coming financial year, meaning millions of families will shoulder the cost of the increased levy simply because they continue to rely on a boiler rather than switching to a heat pump.
Installing a heat pump typically costs around £13,500. While a £7,500 government subsidy is available, the remaining upfront cost is still unaffordable for many households. In addition, annual energy bills can be higher than those for a boiler unless consumers are able to access specific, often limited, electricity tariffs.
As a result, many households have little realistic choice but to replace like-for-like with a boiler – and pay the boiler tax.
Commenting on the increase, Mike Foster, chief executive of the Energy and Utilities Alliance (EUA), said: “Households across the UK are struggling to make ends meet during a prolonged cost-of-living crisis. Despite repeated assurances that the government is on the side of consumers and focused on cutting costs, the Net Zero Boiler Tax is being increased by a third.
“Adding £36 to the price of a boiler may not sound significant to those who designed this policy, but for families already facing higher food bills, fuel costs and ongoing uncertainty about energy prices, every extra pound matters.
“The Clean Heat Market Mechanism is effectively a fine on manufacturers for missing centrally set targets. Those fines do not disappear – they are passed straight on to consumers, turning this into a direct tax on households who need a new boiler.”