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Witten by Bernard Morgan (Engineer).
First Published: January 29, 2024. Updated: February 8, 2024

Clean Heat Market Mechanism (CHMM)

The Clean Heat Market Mechanism (CHMM), effective from January 1, 2024, aims to accelerate the adoption of heat pumps in the UK. This initiative is part of the government’s strategy to achieve Net Zero CO2 emissions by 2050, focusing on reducing the carbon footprint of home heating systems.

Key takeaways

  • The CHMM targets a significant increase in heat pump installations to meet the Net Zero CO2 emissions goal by 2050.
  • Boiler manufacturers must match a percentage of their sales with heat pump installations, increasing annually.
  • Non-compliance with CHMM targets will result in substantial fines for manufacturers.

Clean Heat Market Mechanism (CHMM) Overview

The CHMM, introduced to support the UK’s Net Zero 2050 goal, mandates boiler manufacturers to substitute some of their boiler sales with heat pumps or hybrid systems. This substitution starts at 4% in the first year, increasing to around 25% over time. The mechanism is designed to shift the market from natural gas-fired systems, a significant CO2 contributor, to more sustainable heating solutions like heat pumps.

Impact on Boilerhut

Boilerhut does not make boilers and isn’t affected directly by this change in regulation. However, as a boiler installation business in the UK, we will be impacted indirectly.

We are predicting an unfortunate rise in boiler prices due to this. The heat pump market just isn’t quite where it needs to be. This means prices will rise, with the only beneficiary being the government.

Market dynamics and challenges

The heat pump market is not robust enough to meet the CHMM’s ambitious targets. With a significant portion of heat pump installations going into new builds (which do not count towards the CHMM quota), the retrofit market is under pressure. The recent policy changes, including the deferment of the ban on Oil and LPG boilers and exemptions for certain homes, further complicate the situation, reducing the potential market for heat pumps.

If you would like to read through some of the challenges in installing air source heat pumps into older homes, please read our guide >

Response and Implications

In response to these challenges, manufacturers will, most likely, decide to add a CHMM levy onto their gas and oil boilers. This will offset fines.

Conclusion

The CHMM presents significant challenges for boiler manufacturers like Viessmann and Worcester Bosch. While the initiative aims to bridge the cost gap between traditional boilers and heat pumps, its current structure and market conditions make it difficult for manufacturers to meet the targets without incurring substantial fines.

The situation calls for continuous monitoring and potential policy adjustments to ensure the scheme’s success and the broader goal of reducing CO2 emissions from home heating.

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