Heat pump production policy “risks jobs and boiler price hikes”

Energy and Utilities Alliance
Mike Foster, CEO of the Energy and Utilities Alliance

A proposed government heat pump production quota could threaten the UK with job losses and price hikes on boilers, according to an heating industry expert.

Branded an “out of touch” and “absurd” policy by Mike Foster, CEO of the trade body the Energy and Utilities Alliance (EUA), a market-based mechanism for low carbon heat proposes heating manufacturers’ heat pump sales should represent 4% of gas boiler sales.

For every boiler sold over this quota, the EUA warned, a £5,000 fine would be imposed on the manufacturer, setting a maximum liability of £340 million a year.

Mike said: “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 want 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.

“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 but also offer up a solution. They are yet to hear back.”

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