The government released a consultation on a clean heat market mechanism on 30 March 2023, the Heat Pump Association said, describing it as a policy to grow the number of heat pumps installed in premises each year through a market incentive1. The association welcomed the package of measures as a step towards the target of 600,000 heat pump installations per year by 20281.
The same announcement extended the Boiler Upgrade Scheme until 2028, which the association said would help the scheme take full advantage of money available to help households with the initial up-front costs of installing heat pump systems1. It added that it hopes to see a more detailed government response to issues raised in the House of Lords review of the scheme, and an indication of how much funding is available to consumers1. A new £30 million Heat Pump Investment Accelerator was also set out, intended to boost heat pump manufacturing and the supply chain1.
Installers are covered too: the Home Decarbonisation Skills Training Competition was extended, providing discounts for heat pump training for installers across England1. The announcement also included news that gas and electricity costs will be rebalanced to speed up electrification for households and businesses, which the association said would narrow the running cost gap between fossil fuel boilers and heat pumps1.
"The government have released a consultation on clean heat market mechanism"
The association said it has advocated a long term, predictable policy framework for home heating, including a fixed date for phasing out fossil fuel boilers1. It said it hopes the government will publish its response to Chris Skidmore's Net Zero Review and commit to a firm end date for the sale of fossil fuel boilers1. No figure for the proposed market incentive, no consultation closing date and no start date for the mechanism appear in the announcement as reported1.
Why it matters for households
The Clean Heat Market Mechanism is aimed at the supply side: it would place an obligation on the market to increase the number of heat pumps installed each year, rather than paying households directly1. For a household, the practical effects sit in the other measures. The Boiler Upgrade Scheme extension to 2028 keeps a grant route open for the up-front cost of a heat pump, though the association notes the funding available to consumers has not been indicated1. Rebalancing gas and electricity costs bears on running costs, the point at which a heat pump competes with a gas boiler1. Training discounts for installers across England bear on how many trained installers are available to do the work1. The 600,000 a year by 2028 figure is the government's installation target, not a household obligation1.
What happens next
The consultation is the next stage for the mechanism, and its outcome has not been reported1. The association is waiting for a detailed government response to the House of Lords review of the Boiler Upgrade Scheme, an indication of consumer funding, a response to the Net Zero Review and a firm end date for fossil fuel boiler sales1. The Department for Energy Security and Net Zero is the department behind this policy area; how energy consultations convert into rules is set out in our guide.