Heat Pump Association responds to Clean Heat Market Mechanism
19 Dec 2023
The government has announced that it will launch the Clean Heat Market Mechanism (CHMM) in 2024 to mixed industry response.
The CHMM will mandate boiler manufacturers to sell a certain quota of heat pumps or face a fine. In the first year, which starts in April 2024, heat pump sales must equal 4% of total boiler sales, rising to 6% in the second year. Manufacturers will earn ‘credits’ for heat pumps installed and notified under MCS, with hybrid systems earning 0.5 of a credit. Shortfalls will result in a charge of £3,000 for every missing credit.
According to the DESNZ consultation response, the aim of the CHMM is to provide “industry with a clear framework against which to invest in innovations to make it cheaper, easier and more attractive for homeowners to install a heat pump, supported by the Boiler Upgrade Scheme grant, while keeping the choice to install a heat pump fully voluntary.”
Part of a bigger picture
However, respondents to the consultation highlighted a number of concerns around the lack of enabling policy support required to achieve sustainable growth, including:
· the need to rebalance the relative price of gas and electricity
· the need for financial support with the upfront costs of heat decarbonisation
· the need for more qualified heat pump installers to enable projected growth.
The Heat Pump Association (HPA), whose membership includes heat pump manufacturers that provide over 85% of heat pumps in the UK, praised the government for taking a phased approach to manufacturer mandates while highlighting industry concerns.
Charlotte Lee, CEO of the HPA, said:
“We welcome the clarity provided by the publication of the Government’s response to the Clean Heat Market Mechanism and acknowledge the adjustments made to the scheme which include; a reduced penalty payment, the ability to carry forward a larger percentage of unmet obligations, introducing a consistent approach in the new build sector and not introducing a multiplier to penalise unmet targets.
“Whilst the sector remains concerned about the impact of the scheme on the market given the lack of supporting policy enablers- such as addressing the imbalance between levies on gas and electricity bills to reduce the price of electricity relative to gas, we are committed to working pro-actively with Government and the Environment Agency to support a smooth implementation of the scheme.”
The government said it “recognises the CHMM must be situated within a broader set of actions promoting energy security and supporting the decarbonisation of heat in a proportionate way that does not place undue costs on individual households.
“As set out in the consultation document, we are taking action on a range of fronts to support these ends and will continue to consider where further policy action may be justified. The CHMM is just one important part of that wider enabling policy framework to accelerate the heat pump market’s expansion.”
Heat pump installers needed!
If your centre does not yet offer heat pump training, now is the time. The government has just announced further funding for the Boiler Upgrade Scheme following a spike in interest when the grant rose from £5,000 to £7,500.
What's needed now is thousands more qualified heat pump engineers to deliver low-carbon heating systems over the next three decades.
Training centres have a key role to play. Talk to us today about running LCL Awards heat pump training courses at your centre.
The government has announced that it will launch the Clean Heat Market Mechanism (CHMM) in 2024 to mixed industry response.
The CHMM will mandate boiler manufacturers to sell a certain quota of heat pumps or face a fine. In the first year, which starts in April 2024, heat pump sales must equal 4% of total boiler sales, rising to 6% in the second year. Manufacturers will earn ‘credits’ for heat pumps installed and notified under MCS, with hybrid systems earning 0.5 of a credit. Shortfalls will result in a charge of £3,000 for every missing credit.
According to the DESNZ consultation response, the aim of the CHMM is to provide “industry with a clear framework against which to invest in innovations to make it cheaper, easier and more attractive for homeowners to install a heat pump, supported by the Boiler Upgrade Scheme grant, while keeping the choice to install a heat pump fully voluntary.”
Part of a bigger picture
However, respondents to the consultation highlighted a number of concerns around the lack of enabling policy support required to achieve sustainable growth, including:
· the need to rebalance the relative price of gas and electricity
· the need for financial support with the upfront costs of heat decarbonisation
· the need for more qualified heat pump installers to enable projected growth.
The Heat Pump Association (HPA), whose membership includes heat pump manufacturers that provide over 85% of heat pumps in the UK, praised the government for taking a phased approach to manufacturer mandates while highlighting industry concerns.
Charlotte Lee, CEO of the HPA, said:
“We welcome the clarity provided by the publication of the Government’s response to the Clean Heat Market Mechanism and acknowledge the adjustments made to the scheme which include; a reduced penalty payment, the ability to carry forward a larger percentage of unmet obligations, introducing a consistent approach in the new build sector and not introducing a multiplier to penalise unmet targets.
“Whilst the sector remains concerned about the impact of the scheme on the market given the lack of supporting policy enablers- such as addressing the imbalance between levies on gas and electricity bills to reduce the price of electricity relative to gas, we are committed to working pro-actively with Government and the Environment Agency to support a smooth implementation of the scheme.”
The government said it “recognises the CHMM must be situated within a broader set of actions promoting energy security and supporting the decarbonisation of heat in a proportionate way that does not place undue costs on individual households.
“As set out in the consultation document, we are taking action on a range of fronts to support these ends and will continue to consider where further policy action may be justified. The CHMM is just one important part of that wider enabling policy framework to accelerate the heat pump market’s expansion.”
Heat pump installers needed!
If your centre does not yet offer heat pump training, now is the time. The government has just announced further funding for the Boiler Upgrade Scheme following a spike in interest when the grant rose from £5,000 to £7,500.
What's needed now is thousands more qualified heat pump engineers to deliver low-carbon heating systems over the next three decades.
Training centres have a key role to play. Talk to us today about running LCL Awards heat pump training courses at your centre.