The reformed Clean Heat Market Mechanism (CHMM) came into force on 1 April 2025, the government confirmed, with changes intended to give manufacturers time to scale up supply chains1. The mechanism sets rising targets for manufacturers for heat pump installations as a proportion of gas and oil boiler sales2. The Scottish Government's 2025 heat in buildings progress report states that the CHMM started on 1 April 2025 and will run until at least 20293. The Welsh Government's Heat Strategy for Wales, published in July 2024, had already noted that the UK Government had confirmed the CHMM would launch in April 20254.
The government said the reformed mechanism would make heat pumps a more attractive choice for households and boost sales "without penalising those buying a new gas boiler", and that government support would be available for each heat pump installation required under the mechanism in 2025 to 20261. The Department for Energy Security and Net Zero set out the reform alongside a wider package on 21 November 2024, including an extra £30 million for the Boiler Upgrade Scheme in that financial year and an almost doubling of its budget to £295 million for the next1. The same announcement confirmed a £7,500 heat pump grant for homeowners in England and Wales through the Boiler Upgrade Scheme, and a plan to remove the rule requiring air source heat pumps in England to be installed at least one metre from a property boundary1.
"Introducing a reformed Clean Heat Market Mechanism on 1 April 2025, with new changes to make sure manufacturers have the time they need to scale up supply chains"
The government's December 2024 response to the Climate Change Committee's progress report also referred to "the introduction of a reformed Clean Heat Market Mechanism (CHMM) next year (from 1 April 2025)"5. Industry bodies quoted in the November announcement gave the reform a mixed welcome. Energy UK said it was right that the government did not further delay delivery of the CHMM, calling the mechanism vital to increasing availability of heat pumps and attracting investment into UK manufacturing1. The Energy and Utilities Alliance said the outcome no longer unfairly penalises business and consumers1. Worcester Bosch said it was happy the minister had recognised the need to revise the CHMM and that further policy changes were required to increase heat pump demand and adoption in the UK1.
The government's November statement set out the following figures for home upgrades in 2025 to 20261:
| Measure | Homes expected to be upgraded | Funding |
|---|---|---|
| Warm Homes: Social Housing Fund | up to 60,000 | £374m |
| Warm Homes: Local Grant | up to 9,000 | £88m |
| Boiler Upgrade Scheme | up to 39,000 | £295m |
| ECO4 and Great British Insulation Scheme | up to 200,000 | supplier-led |
The government said the package amounted to around £3.2 billion of investment in warmer homes across 2025 to 2026 from government, social housing providers and supplier obligations, with an estimated £600 million to £700 million in co-funding from social housing providers and £1.4 billion to £1.6 billion under the supplier-led schemes1. It said up to 300,000 households would benefit from home upgrades in the next year1.
Why it matters for households
The CHMM does not put an obligation on households. It places targets on manufacturers, so its effect on a home is indirect: it is intended to increase the number of heat pumps available and the incentive for companies to make installation easier and more attractive2. For a household weighing up a heat pump, the mechanism sits alongside the Boiler Upgrade Scheme grant of £7,500 in England and Wales, which the government said can save families around £100 a year compared with a gas boiler when a smart tariff is used effectively1. The government also said insulating homes could save homeowners around £200 per year1. The planning change for air source heat pumps in England, announced alongside the reform, is separate from the mechanism and was described as taking effect from early next year1. The government has not reported how the reformed mechanism's targets are set year by year, or what the first compliance period requires of individual manufacturers.
What happens next
The government said the CHMM would run from 1 April 2025, with support available for each heat pump installation required under the mechanism in 2025 to 20261. The Scottish Government's progress report states the mechanism will run until at least 20293. A consultation on the Boiler Upgrade Scheme and on certification requirements for clean heat schemes was issued on 30 April 2025, with responses due by 11 June 2025; it refers to the CHMM as having launched on 1 April 20252.
Sources5 cited
- Help to save households money and deliver cleaner heat to homes - GOV.UK, gov.uk
- Boiler Upgrade Scheme and Certification Requirements Consultation, assets.publishing.service.gov.uk
- 3. Enablers - Heat in Buildings: progress report 2025 - gov.scot, gov.scot
- Heat strategy for Wales, gov.wales
- Accelerating to Net Zero: responding to the CCC progress report and delivering the Clean Energy Superpower Mission (accessible webpage) - GOV.UK, gov.uk