The UK Government has announced the commencement of the new Clean Heat Market Mechanism from April 2025 alongside a suite of other pro-heat pump measures. These will help our region decarbonise heating affordably and at pace, for a fairer, greener and healthier West Midlands.
The new Clean Heat Market Mechanism will encourage gas boiler manufacturers to take measures to scale up sales of heat pumps. Boiler manufacturers will need a minimum proportion of their sales to comprise of heat pumps each year, or face fines for each 'missing heat pump credit'. The target level of sales will be 6% in the first year and go up annually, while the initial level of fines is to be set at £500 per fully-electric heat pump unsold. The fine is lower than the initially proposed £3000 per missing heat pump credit.
Terraced houses in Redditch
Energy Capital submitted Consultation response to addendum on the Clean Heat Market Mechanism in March. The consultation followed a late decision to delay the start of the Clean Heat Market Mechanism, which was initially set for April 2024.
Building heating is one of the biggest sources of UK carbon emissions and urgent action is needed on all fronts to reach our West Midlands 2041 and national 2050 decarbonisation goals. Delays to policy measures create uncertainty about the direction of the transition and result in a failure to reduce heating costs for consumers. Our response to the consultation is available in full here.
In addition, the Government has announced further measures as part of its Warm Homes Plan to accelerate the roll out of decarbonise heating solutions. These include:
- Increasing the pot of money available for the Boiler Upgrade Scheme Gants – meaning more households can access the £7500 to install a heat pump in their home. Find out how you can apply in our region here, or here if you’re a landlord.
- Removing the need for planning permission for new heat pump installations, making the process much simpler, especially for non-detached households.
Energy Capital is implementing its Regional Energy Strategy to support a whole systems approach to energy planning and investment that puts the people of the West Midlands first and aims for a Just Transition to a decarbonised energy system. However, to enable us to achieve this we will continue to ask Government for wider measures, including to meet the commitment in its Clean Heat and Buildings Strategy to rebalance energy prices. This means bringing electricity prices in line with gas prices by removing or redistributing levies to ensure that heat pumps are no more expensive to buy and run than gas boilers regardless of the energy tariff you are on.