Boiler manufacturers may face a government probe into “unjustified” price hikes imposed on consumers because of the so-called boiler tax.
Claire Coutinho, the Secretary of State for Energy Security and Net Zero, has called on the Competition and Markets Authority to look into the home heating market, which was recently accused of spreading anti-heat pump propaganda in a bid to protect its own interests.
The news comes as fuel poverty in the UK rises amid spiralling energy price rises.
What are the price increases for boilers?
In January it was reported that boiler companies announced a £120 rise in installation costs, branding it a “boiler tax” in response to the the Clean Heat Market Mechanism (CHMM).
Ministers claim the scheme is an essential part of meeting the 600,000 heat pumps installed per year by 2028 target.
The policy mandates that 4% of heating manufacturers’ sales should be from heat pumps or else they face fines.
Why were boiler prices increased?
Worcester Bosch, Vaillant, Ideal and Baxi, who control 90% of the market, have previously warned that costs would be passed onto consumers to cover the costs of any penalties incurred by failing to meet the required level of heat pump sales.
Lord Callanan, responding to a question in the House of Lords regarding the ‘boiler tax’, stated: “There is no such thing as a boiler tax, and therefore it is impossible to scrap it.
“We will be implementing the Clean Heat Market Mechanism because it is an essential part of meeting the 600,000 heat pumps installed per year by 2028 target and our carbon budget.”
The home heating industry has been accused before of trying to persuade the government to promote hydrogen heating instead of heat pumps as it was claimed this would cause less disruption to gas companies' business models.
Competitions inquiry launched into boiler companies
Claire Coutinho accused leading boiler companies of "unjustified price hikes for gas boilers" that was working against the interests of homeowners.
She stated: “These pricing decisions have called into question whether the home heating industry, which has four companies dominating 90% of the market, is working as well as it should and delivering the best outcome for consumers.
“We are calling for the Competition and Markets Authority to conduct a review of the home heating appliance market to understand whether any weakness in competition is contributing to prices being higher than they would be in a well-functioning market.”
