Ofgem's 6.4% rise in the energy price cap came into effect on 31 March 2025, the same day the Government's Clean Heat Market Mechanism started1. The mechanism requires large UK boiler manufacturers to ensure heat pumps make up a percentage of their product sales1.
The Energy and Climate Intelligence Unit (ECIU), an independent research group, published comment on the two changes on the same date. Jess Ralston, an analyst at ECIU, said gas prices remain volatile, having reached a two-year high in early February1. She said the mechanism would see manufacturers compete to sell more electric heat pumps to replace boilers, bringing prices down1.
"Some manufacturers added a self-imposed 'boiler tax', charging consumers an additional £110 to the price of a boiler last year which the companies themselves, not the government, received."
Ralston also said the UK could have been on its way to greater energy security a year earlier, but that gas boiler manufacturers lobbied hard for a delay, and that a great deal of fuss was made over sales targets that history now shows the industry would have hit anyway1. She asked whether all manufacturers had guaranteed that all buyers have now had the made-up boiler tax repaid1. The ECIU comment does not state how many manufacturers applied the £110 charge, how many boilers it was applied to, or whether any repayments have been made; those points have not been reported1.
The price cap sets the maximum a supplier can charge for a unit of energy on a default tariff. Its history and announcement dates are set out in the price cap history guide, and the regulator's role is covered under Ofgem. The scheme that began on the same day is explained in the guide to the Clean Heat Market Mechanism.
Why it matters for households
The cap rise and the mechanism pull in different directions for a household's energy independence. A higher cap raises what a home on a default tariff pays for the same gas and electricity, and ECIU's comment links that exposure to gas price volatility rather than to the cost of generating power in the UK1. The mechanism works on the supply side instead, by requiring large boiler manufacturers to sell a proportion of heat pumps alongside their boiler sales1. ECIU's argument is that more heat pumps sold means lower prices for them, and that heat pumps run increasingly on British renewables, whereas gas boilers remain reliant on foreign gas imports as North Sea output declines1. For a household, that is the difference between a heating system whose running cost tracks an imported fuel and one whose running cost tracks domestic electricity. The £110 charge described by ECIU is a separate point: it was added by some manufacturers to boiler prices, and the companies, not the government, received it1.
What happens next
The ECIU comment sets out no further dated steps. It asks whether manufacturers have guaranteed that buyers have had the £110 charge repaid, but does not say when or how that would be confirmed1. The next price cap announcement date is not given in the source1.