Two air source heat pumps
An industry body has dubbed a government initiative aimed at increasing heat pump installations as a ‘Soviet-style production quota’ that will create an unfair playing field between domestic and overseas producers.
At the end of March, the Department for Energy & Net Zero launched a consultation on a plan to fine large manufacturers who do not sell enough heat pumps compared to gas boilers under a new percentage-based sales quota.
Producers would be required to sell heat pumps equivalent to 4 per cent of their gas or oil boiler sales above minimum sales volume baselines. Manufacturers would be fined £5,000 for every gas or oil boiler that takes them below that threshold.
In response to the plans, Energy Utilities Alliance chief executive Mike Foster has written to energy minister Lord Callanan, claiming the move would harm the UK manufacturing sector.
He said: “This whole shambles of a Soviet-style production quota, with fines for selling items the state hasn’t agreed to, is a relic of a by-gone era. The Berlin Wall hasn’t come down for this minister.”
He said that he would be “surprised” if French president Emmanuel Macron had agreed to pay any fines under the proposed regime and “flabbergasted if President Xi of China had too”.
“If the government has no plans to fine overseas business, as it does our own, then it’s simply saying farewell to jobs of British workers.”
The policy could also be in breach of international trade rules, Foster added, saying that a “£5,000 levy on each imported boiler sold in the UK might attract the attention of the EU’s trade negotiators”.
The consultation hopes to create an incentive to grow the numbers of heat pumps installed each year and provide industry with a long-term policy framework for investment.
In 2021, the government announced a target of 600,000 heat pumps installations per year by 2028. However, 1.5m gas boilers were installed in 2021, while only 55,000 heat pumps were fitted.
The supply of heat pumps remains a critical issue, as it is vital that they replace gas boilers to further reduce the carbon footprint of the construction industry.
According to the EHPA, Britain sold the fewest heat pumps relative to population size in Europe last year. Unlike traditional gas boilers, heat pumps use electricity to channel warmth from the ground or the air into the home.
Heat pump suppliers have spoken out against proposed regulations which they describe as “Soviet-style”.
The new regulations, which have been put forward by the Government, threaten to make it harder for smaller businesses to compete in the industry, by introducing a system which favours large heat pump suppliers.
Under the new rules, companies would be forced to meet certain standards to be able to supply heat pumps, such as training programmes and stock levels.
The regulations could make it difficult for smaller businesses, who may not have the resources to meet the same standard as larger suppliers.
Grant Way, managing director of Ecoline Heat Pumps, was critical of the proposed regulations, saying: “It’s a pretty Soviet-style approach where the smaller firms have no chance of ever competing with the handful of large players who will meet the standards.”
He added: “We thought that the government was trying to encourage a more competitive marketplace and make it easier for small businesses, but this proposal would do exactly the opposite.”
The regulations will be discussed by the government in the coming weeks and a final decision is expected in the near future.
In the meantime, heat pump suppliers are continuing to voice their opposition to the proposed regulations which they believe could have a negative impact on businesses in the sector.