Preparing for the Clean Heat Market Mechanism (CHMM)

The UK has set ambitious plans to install 600,000 heat pumps per year by 2028. However, only 55,000 of the units were sold in 2022, revealing that heat pump rollout will need to rapidly grow in the coming years.

The Clean Heat Market Mechanism (CHMM) was designed under the previous government to incentivise the market to sell more heat pumps, encouraging manufacturers to prioritise these over more traditional heating systems such as gas boilers[1]. The policy is also designed to provide the UK’s heating appliance industry with greater policy certainty, supporting growth and the transition away from fossil fuel boilers.

The standard places an obligation on boiler manufacturers to meet a target for sales of heat pumps relative to their sales of gas and oil boilers. The proportion of heat pump sales obligated parties would need to achieve would then rise over time, in line with government policy timescales. 

Under the CHMM, boiler manufacturers will face a £3,000 payment for each missed heat pump sale. For each MCS certified heat pump installation, manufacturers receive a ‘credit’, while hybrid heat pump systems count for half of a credit. The policy also allows for additional flexibility to help manufacturers adjust their business plans by allowing companies to carry forward up to 35% of the annual target from one year to the next, and then aim for more heat pump sales the following year. Additionally, manufacturers can also trade credits with other manufacturers. 

The aim is that if the Government increases competition within the heat pump industry, it will drive down consumer bills while providing increased choice when consumers seek to upgrade their heating systems. 

The policy was originally meant to be introduced in April 2024, however the Department for Energy Security & Net Zero (DESNZ) announced in March 2024 that it would delay its introduction by a year, allowing more time for the industry to prepare. In response to industry reaction, the Government added that it was still “fully focussed on supporting the development of a heat pump market of 600,000 installations per year by 2028” and we expect the policy to come into effect in April 2025[2].

Also set to come into force next year is the Future Homes and Buildings Standard[3], mandating a significant uplift in building regulations and for all homes to be ‘zero carbon ready’, requiring no retrofit works to produce zero carbon emissions as the electricity grid decarbonises. The plans also mean that no new homes will be able to connect to the gas network from 2025. 

It’s clear that from next year, we’ll begin to see a huge change in not only the design of new homes and buildings, but a ‘new norm’ when it comes to where we get our heating and hot water from. Gas boilers have been part of the furniture across the UK for hundreds of years and condensing boilers became mandatory on all new boiler installations in the UK from 2005. For all consumers are to switch to heat pumps or other low carbon solutions, they must be easy to use and accessible for all occupants.

Drayton Prepares for a Clean Heat Market

Drayton has been simplifying central heating controls for over 75 years and our solutions are designed to boost the energy efficiency of domestic heating systems. The systems are easy to install, easy to use, and can be controlled anytime, and from anywhere.

The control systems are also compatible with all main forms of heating appliances, including low carbon heat pumps, solar or biomass appliances. This is crucial for consumers upgrading to new low carbon heating or moving into new builds working to comply with enhanced building regulations.

Drayton provides a familiar control system whatever the heating technology, helping to smoothen out the energy transition and improve consumer confidence in using new heating systems. 

For installers, developers, and housebuilders, installing heating controls will help to ensure compliance with the Future Homes and Buildings Standard, resulting in higher levels of energy-efficiency while helping new occupants make the most of their energy.

[1] Clean heat market mechanism - GOV.UK (www.gov.uk)

[2] Clean heat market mechanism: proposal to change the scheme start date to 1 April 2025 - GOV.UK (www.gov.uk)

[3] The Future Homes and Buildings Standards: 2023 consultation - GOV.UK (www.gov.uk)