The Impact of the Clean Heat Market Mechanism on Home Heating
As the UK moves towards Net Zero carbon emissions by 2050, domestic heating is under the microscope. With heating the UK’s 28 million homes accounting for 18% of all UK greenhouse gas emissions in 2021, it’s no wonder. Gas boilers are still the most common form of home heating, but they rely on fossil fuels – which presents a problem for the country’s long-term sustainability goals.
To help shift households towards greener options, the government is introducing the Clean Heat Market Mechanism (CHMM) to the UK. You may have heard of it referred to as ‘boiler tax’. Essentially, the CHMM is a new regulation aimed at transforming how heating appliances are made, sold, and installed in the country.
In this article, we’ll explore what exactly the CHMM is, how it could influence the boiler and heat pump markets, and - most importantly - what all of this means for you as a homeowner.
What is the Clean Heat Market Mechanism?
The Clean Heat Market Mechanism is a UK-wide government policy that came into effect on April 1st 2025 and will run until at least March 31st 2029. It forms part of the government’s wider strategy to decarbonise household heating.
To avoid placing restrictions or penalties on consumers (that’s you, homeowners!), the CHMM instead requires manufacturers to ensure that a percentage of their heating sales are low-carbon. Approaching it this way should help drive a gradual - but definite - move away from gas boilers.
So what does this look like? For the first year of the CHMM, manufacturers will need to ensure that 6% of their relevant heating appliance sales are cleaner, greener heat pumps. This target will increase annually to encourage sustained market momentum towards renewable domestic heating. In time, the CHMM aims to support more people in switching to a heat pump as economies of scale begin to reduce costs.
How does the mechanism work?
Every year for the duration of the CHMM, boiler manufacturers must meet a heat pump sales quota, which will be calculated based on their previous year’s fossil fuel boiler sales. They’ll have to register their qualifying heat pump installations as MCS-certified to get CHMM credits.
If manufacturers fail to meet these quotas, each missed unit will result in a £500 penalty.
As well as directly gaining credits via installation, manufacturers can trade, bank, or borrow credits for flexibility as they scale up their heat pump supply chains.
All of this results in a financial incentive to actively promote heat pumps, improve upon them, and make them more accessible.
What is the impact on boiler manufacturers?
Manufacturers will need to adapt their product strategies to meet their CHMM quotas – and, in general, move more quickly towards renewable technology. Businesses that largely focus on traditional gas boilers will now need to invest heavily in their heat pump offerings, services, and infrastructure.
Because of the financial risk of non-compliance, some manufacturers might raise the prices of gas boilers – particularly as penalties come into play.
The theory is that over time, the CHMM will gradually make low-carbon heating options more cost-competitive and bring them into the mainstream.
What does the CHMM mean for homeowners?
All of this might seem quite technical and policy-related. So let’s explore in simple terms what it could mean for you.
More heat pumps on the market
Whether you go browsing for a new heating system or speak to a heating engineer, you’ll start to notice heat pumps being talked about as favourable over traditional gas boilers.
While they’re not going anywhere at the moment, the role of gas boilers will gradually diminish over time – especially as heat pump technology continues to improve.
At Swale Heating, we’ve been supporting the shift to lower-carbon heating for some time with expert installations of air source heat pumps, one of the most economical and sustainable options available. You can explore our air source heat pump options here.
Pricing considerations
There’s no doubt that the new heating regulations will shift the pricing dynamics in the home heating market. As we mentioned earlier, this may mean that traditional gas boilers become more expensive, particularly if manufacturers pass on the cost of non-compliance fines.
However, increased supply of heat pumps and competition in the growing market should begin to bring down costs over time.
Let’s be clear here - heat pumps can be more expensive upfront. But the lifetime savings in running costs over the long term (especially in well-insulated homes) are a fantastic positive to weigh up against the initial investment.
It’s also worth looking into the BUS scheme for financial support, which we’ll explore later.
Sustainability & long-term savings
Heat pumps are most efficient when they don’t have to do excessive heavy lifting to heat your home. That means that in a well-insulated home - which holds on to warmth for longer - the heat pump can run at a lower temperature and still keep you comfortable. Because of this, they also work best with heating systems that spread warmth over time, like large radiators or even underfloor heating.
Homes that aren’t fitted with the best insulation and radiator systems will still benefit from the efficiency of heat pumps. It may just mean that if you’ve got an older property, you consider upgrading these elements of your home alongside (or after) the heat pump upgrade.
It’s the same with any home heating appliance - if you want to make the most of the heat it supplies so you can save energy and lower your bills, insulation is key.
What support is available for homeowners?
All this talk of market fluctuations, of price increases and decreases, might sound a bit daunting. So now seems like a good time to remind our readers that the intention of the CHMM is to make these eco-friendly heating options more accessible to the public.
And it’s not just the CHMM that does that. A range of government schemes are making renewable heating more affordable than ever - with the most notable being the Boiler Upgrade Scheme (BUS).
The BUS offers up to £7,500 towards the cost of installing an eligible heat pump in your home. It’s available as a grant in England and Wales and, if your home qualifies, could significantly reduce your upfront costs.
Other support may be available too, whether directly for heat pump fitment or for insulation upgrades, such as:
- Eco+: designed to help low-income homes rated EPC D-G to improve energy performance, Eco+ could help with insulation costs.
- The Warm Homes Local Grant: this allocates funding to local authorities to help low-income households rated EPC D-G by helping with insulation and low-carbon heating costs.
Not sure what support you qualify for? We’re here to help. Visit our Renewable Solutions page to learn more or get in touch.
Challenges & criticisms of the CHMM
Every policy shift comes with its challenges – including those that represent a positive move towards a greener future.
Some industry groups have raised concerns about the cost burden on manufacturers (especially smaller businesses) and how quickly the supply chain will need to adapt to meet the targets.
There’s also the fact that not every home is currently suitable for a heat pump without modification, and many homeowners aren’t familiar with the technology or what they cost to run. This lack of awareness has the potential to hinder initial uptake.
Another challenge lies in the availability of trained heat pump installers. More engineers will doubtless need to be trained and certified to meet rising demands.
Here at Swale Heating, we’re proud to say that we are MCS-certified experts in renewable energy solutions and are highly-trained in fitting air source, ground source, and hybrid heat pumps.
Looking ahead: What the CHMM means for your home
The Clean Heat Market Mechanism is a major policy shift set to help shape the future of residential heating in the UK. Rather than banning boilers and forcing consumers to make the switch, it works behind the scenes by requiring manufacturers to offer more green alternatives and fewer traditional, fossil-fueled boilers.
For homeowners, this should translate to better access to renewable heating, along with opportunities to save money and reduce household emissions – especially with the help of government grants.
Whether you want to make the switch now or you’re keen to understand your options, it’s an excellent time to start planning. The team here at Swale Heating is here to help you make a future-proofed choice.
Why not explore our renewable heating solutions? Or, contact us today to speak to one of our experts.
