The Government Gas Boiler Levy, also known as the Clean Heat Market Mechanism (CHMM), is a policy aimed at encouraging the transition from traditional gas boilers to greener heating methods, such as heat pumps. This comprehensive guide will delve into the technical details, impact on gas boiler prices, and the government’s decision to scrap the levy.
What is the Government Gas Boiler Levy?
The CHMM is a mechanism that requires boiler manufacturers to install a certain number of heat pumps for every gas and oil boiler they sell. The target is to reach 600,000 eco-friendly heat pump installations per year by 2028. If manufacturers fail to meet these targets, they face fines of £3,000 per heat pump installation missed.
To cover these potential fines, manufacturers have been increasing the prices of their gas boilers, effectively passing the cost onto consumers. This increase is known as the “boiler tax” or “CHMM levy” and ranges from £95 to £120 per boiler, depending on the manufacturer.
How does the CHMM boiler levy affect gas boiler prices?
The levy has led to significant price hikes for gas boilers. Manufacturers like Worcester Bosch, Vaillant, Baxi, and Ideal Heating have increased their prices by £95 to £120 per boiler to cover the anticipated fines.
| Manufacturer | Price Increase per Boiler |
|---|---|
| Worcester Bosch | £120 |
| Vaillant | £110 |
| Baxi | £100 |
| Ideal Heating | £95 |
This has resulted in higher costs for consumers, who are effectively paying for the manufacturers’ inability to meet the heat pump installation targets.
Will the government scrap the gas boiler levy?
Yes, the UK government has decided to scrap the CHMM policy due to concerns over the price hikes imposed by manufacturers. The policy was criticized for burdening consumers with higher costs, and the government has opted for a quota system instead.
Under the new quota system, manufacturers must match or substitute 4% of their boiler sales with heat pumps in 2024, increasing to 6% in 2025. This decision is expected to lead to a reduction in gas boiler prices as manufacturers will no longer need to pass on the fines to consumers.
Technical Specification of Government Gas Boiler Levy
- Target: 600,000 eco-friendly heat pump installations per year by 2028.
- Fines: £3,000 per heat pump installation missed.
- Price Increase: £95 to £120 per gas boiler, depending on the manufacturer.
- Quota System: Manufacturers must match or substitute 4% of their boiler sales with heat pumps in 2024, increasing to 6% in 2025.
References:
- Celsius Plumbers. (2023, December 22). CHMM Boiler Levy – A New Boiler Tax for Homeowners Using Gas. Retrieved from https://celsiusplumbers.com/blog/chmm-boiler-levy-2024/
- Manchester Evening News. (2024, March 18). Consumers could get ‘boiler tax’ refund after government kicks policy into long grass. Retrieved from https://www.manchestereveningnews.co.uk/news/cost-of-living/consumers-could-boiler-tax-refund-28838621
- The Independent. (2024, February 7). Energy firms could make millions from gas ‘boiler tax’, analysis suggests. Retrieved from https://www.independent.co.uk/climate-change/news/berkshire-slough-rachel-reeves-government-claire-coutinho-b2492109.html