Heat pump suppliers hit out at proposed ‘Soviet-style’ regulation

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.