Price of gas boilers could rise by £300 under 'green' regime
6th September 2023

Price of gas boilers could rise by as much as £300 under new government ‘green’ regime

The price of gas boilers could rise by as much as £300 under a new government ‘green’ regime, it was warned today.

Ministers want to introduce a requirement on manufacturers to push sales of heat pumps, which replace gas boilers and so cut the nation’s carbon emissions.

The proposal, called the Clean Heat Market Mechanism, would set makers a target to ensure at least 4 per cent of new systems sold are heat pumps. Firms that fail to meet this target would be required to pay ‘credits’ to other manufacturers that are selling heat pumps, or else pay multiple fines.

The boss of Worcester Bosch says these charges will inevitably be passed on to customers in the form of higher prices on gas boilers.

The price of gas boilers could rise by as much as £300 under a new government ‘green’ regime

Chief executive Carl Arntzen said: ‘The price of a boiler currently within the supply chain is anything from about £700 to £1,000.

‘In some cases, for the top end of our models, we’re having to look at around a £300 price increase.’

He likened the policy to a ‘boiler tax’ and suggested the measure was designed to increase the cost of gas boilers to bring them closer to expensive heat pumps.

The pumps typically cost more than £10,000, which can be partially offset by a £5,000 government grant. However, many homes require additional work, such as insulation, to ensure they are effective.

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Mr Arntzen claimed the new regime could result in the loss of nearly 8,000 UK manufacturing jobs.

‘There is a high level of risk that they will put us and three other boiler manufacturers out of business,’ he said.

Worcester Bosch said it is already taking steps to boost heat pump sales without the threat of financial penalties. It sold about half a million boilers last year and about 1,200 heat pumps, but it expects the totals to equalise by 2030.

In a letter to boiler installers, Worcester Bosch said it was ‘inevitable’ the firm would face fines which would have to be passed on to customers with higher prices.

However, the company’s claims were rejected by Richard Lowes at the Regulatory Assistance Project, an environmental think tank, who suggested the new regime was being used as a cover to hike prices.

He told The Times: ‘If the proposed policy does come into force, it’s not even expected to have a material impact on the market until 2025, which begs the question of why prices would be put up next year.’

Officials at the Department for Energy Security and Net Zero said: ‘No manufacturer will need to face penalties or increase the price of a gas boiler.

‘The scheme aims to set targets that are achievable, providing the industry with flexible options to support our ambition to make heat pumps an affordable, cleaner and attractive choice for households across the country.’

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