Households could be hit with £140 'boiler tax' under Labour's heat pump plans

Households could be hit with £140 'boiler tax' under Labour's heat pump plans The chief executive of the EUA described the proposals as "economically illiterate" Sign up to the Money Newsletter Email address Sign up I agree to receive updates and information about my account, the GB News Community, and related products and services from GB News. By signing up you agree to the Terms and Conditions and Privacy Policy and Community Rules. Thank you for signing up! See the latest from GB News here . Choose GB News on Google - add us as a preferred source Choose GB News Support GB News Champion free speech and independent journalism while unlocking exclusive benefits. Support us Households buying a new gas boiler could face more than £140 in extra costs under plans to increase heat pump sales targets. The Energy and Utilities Alliance (EUA) warns that manufacturers could pass on the cost of penalties if they fail to meet the higher targets. Energy Secretary Miatta Fahnbulleh is considering raising the proportion of heat pumps manufacturers must sell from eight per cent to 18 per cent of their total sales by 2030. This would more than double the target, requiring boiler makers to sell up to 236,000 heat pumps a year by the end of the decade. Under the Clean Heat Market Mechanism, manufacturers face penalties of up to £500 for each heat pump sale they fall short of the target. The EUA says companies pass these costs on to customers through higher prices for conventional gas boilers. Critics have dubbed this a "boiler tax". The industry body's analysis puts the current extra cost at roughly £100 per household. It estimates that increasing the sales target to 18 per cent would push that figure above £140. The proposed increase comes amid weakening consumer demand for heat pumps, raising concerns that manufacturers could struggle to meet their targets. A typical gas boiler installation costs around £3,000, compared with approximately £13,000 for a heat pump before a £7,500 government grant is taken into account. The EUA warned that households replacing their boilers would bear the cost of the higher targets. Energy Secretary Miatta Fahnbulleh is considering raising the proportion of heat pumps manufacturers must sell from eight per cent to 18 per cent of their total sales by 2030 | GETTY Mike Foster, the chief executive of the EUA, described the proposals under consultation by the Department for Energy Security and Net Zero as "economically illiterate". "Ramping up the penalties that are passed on to consumers shows a worrying lack of awareness," Mr Foster said. "At a time when demand for heat pumps is falling, only the economically illiterate would suggest that supply is the problem." He added: "The heating industry will have no choice but to pass this additional cost on to the consumer; ultimately, they are the ones who will suffer because of this net zero zealotry." The government's own ambition of 450,000 heat pump installations per year by 2030 remains a distant prospect. A report from the UK's climate advisers published in June found that only 52,000 were fitted in homes during 2025. The Government wants around 600,000 heat pumps a year to be installed by 2028 | PA Ed Thomas, head of government and external affairs at Worcester Bosch, said the penalty regime simply drives up boiler prices without expanding the heat pump market. "Government should examine alternative approaches to driving forward the transition, focusing on educating consumers, upskilling installers, demand-side support and action on energy costs," Mr Thomas said. A spokesperson for the Department for Energy Security and Net Zero insisted that manufacturers are under no obligation to pass penalty costs on to their customers." Households buying a new gas boiler could face more than £140 in extra costs | PA The Clean Heat Market Mechanism provides the certainty needed for manufacturers to invest in the UK's heat pump market with confidence, while helping to drive down installation costs for consumers," the spokesperson said. They added: "Britons are showing record demand for heat pumps, and our scheme gives companies the flexibility to take advantage of the rush for heat pumps, which can save families money on their energy bills." Meanwhile, reports emerged on Monday that John Healey was planning to slash heat pump subsidies to free up £2billion for military spending at the Budget later this month. 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