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The UK government is set to cut the level of planned fines for boilermakers who fail to sell enough heat pumps, in a climbdown that follows heavy pushback from industry.
The planned penalties, due to be introduced in April next year, will be cut from £3,000 to £500 for every heat pump sale short of official targets, as the government tries to push uptake of the devices without deterring investors.
The easing follows intense lobbying from industry, which has warned the plans were out of step with market demand and would push up prices for consumers and risk jobs.
In a statement published on Thursday, the government said changes to the scheme would mean manufacturers “have the time they need to scale up supply chains, making heat pumps an even more attractive choice for households”.
Getting more households to switch to heat pumps instead of gas boilers, which heat the vast majority of British homes, is a key challenge for the UK as it works towards a legally binding target of net zero carbon emissions by 2050.
Mike Foster, chief executive of the Energy and Utilities Alliance lobby group, said the scheme “no longer unfairly penalises businesses and consumers” and the change was a “big win for households across the country”.
Heat pumps run on electricity, which in the UK is increasingly generated by wind and solar power, and are highly efficient. However, demand from households has been sluggish, partly because of the upfront costs of buying and installing them. Some homes also require installation upgrades for technology to work at its best.
About 40,000 heat pumps were fitted in 2023, according to the MCS database, well below a government target of 600,000 per year by 2028.
Under plans first proposed by the former Conservative government, boilermakers will face fines from April 2025 unless they sell a certain proportion of heat pumps as well.
The penalty was originally proposed at £5,000 per missed heat pump before being cut to £3,000 by the Tories, and now to £500 under the Labour government which took power in July. The level applies to the first year of the scheme; it could rise after that following a consultation.
The changes come as the government is also under pressure from carmakers to relax rules around how many electric cars they need to sell and the fines they may face for missing targets.
In other changes announced on Thursday, the government increased the budget for available grants for households to install heat pumps, to £295mn next year. It is also relaxing planning rules, so that households can build the apparatus closer to neighbouring properties.
