Mike Foster, CEO of the Energy and Utilities Alliance (EUA), has criticised the proposed market-based mechanism for low carbon heat as “out of touch” and “absurd.”
The policy suggests that heat pump sales of British heating manufacturers should make up 4% of gas boiler sales. Any boiler sold above this quota would result in a fine of £5,000 imposed on the manufacturer, with a maximum annual liability of £340 million.
In current market conditions, this could see the industry having to recoup this loss by ramping up boiler prices, heaping more misery on already hard-pressed consumers and pushing up inflation for everyone.
“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. 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,” said Mr Foster.
Stark reality of a plan to impose huge fines on companies
“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.
“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.
“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.”