A proposed Government heat pump production quota announced by UK Energy Secretary - Grant Shapps could threaten the United Kingdom (UK) with job losses and price hikes on boilers, a heating industry expert has said.
Mechanism for low carbon heat
Branded an 'out of touch' and 'absurd' policy by Mike Foster, CEO of the trade body - the Energy and Utilities Alliance (EUA), the Market-based mechanism for low carbon heat proposes British heating manufacturers’ heat pump sales should represent 4% of gas boiler sales.
For every boiler sold over this quota, a £5,000 fine will be imposed on the manufacturer, setting a maximum liability of £340 million a year.
demand and supply
Punishing manufacturers for selling the boilers that consumers want to buy is simply irrational"
In current market conditions, this could see the industry having to recoup this loss by ramping up the prices of a boiler, heaping more misery on already hard-pressed consumers and pushing up inflation for everyone.
Mr. Foster explains, “Punishing manufacturers for selling the boilers that consumers want to buy is simply irrational, and by doing so, manufacturers may be left with no choice but to raise prices. If the public truly wants to buy heat pumps, our members will sell them that’s the basic law of demand and supply."
import heat pumps
Mike Foster adds, "Instead, this absurd, Soviet-style production quota will force our members to import heat pumps into the UK, to avoid a fine and that’s at the expense of a British-built boiler. The stark reality of a plan to impose huge fines on British companies is that the jobs of British workers will be sacrificed, as manufacturers rely on cheap import units made in the EU and further afield."
Hydrogen Champion
Mike Foster continues, “The Whitehall obsession with this Market Mechanism reaffirms our view. They are simply out of touch with the public, they do not understand even basic economics and frankly, they don’t care about the jobs of British workers."
He concludes, “We have suggested a way forward on this and the UK’s Hydrogen Champion recommended the same way forward. The largest British boiler manufacturers have written to Grant Shapps asking to meet him to highlight their concerns and also offer up a solution. They are yet to hear back.”