The Clean Heat Market Mechanism (CHMM) is designed to drive the adoption of low-carbon clean technologies by requiring boiler manufacturers to increase their share of heat pump sales.

The Government’s Heat and Buildings Strategy notes that heat in buildings accounts for approximately 25% of the UK’s greenhouse gas emissions. Improving the energy efficiency of the nation’s housing stock is one of the most effective ways to cut energy use, reduce bills, and move closer to long-term climate targets.

Heat pumps sit at the centre of that vision because they generate far more heat per unit of electricity than traditional systems. The Clean Heat Market Mechanism puts them at the heart of the low-carbon heating transition by linking the sale of fossil-fuel boilers to the rollout of cleaner technology.

The scheme targets boiler manufacturers, and the idea is straightforward: companies that sell large volumes of gas and oil boilers must also help drive a meaningful rise in heat pump installations. It does not dictate what homeowners should install.

Key Takeaways on the Clean Heat Market Mechanism:

• The Clean Heat Market Mechanism places obligations on boiler manufacturers, not homeowners. Your choice of heating system remains completely unchanged.
• The scheme runs UK-wide from 1 April 2025 until at least 2029.
• Manufacturers that sell large numbers of gas and oil boilers must support a growing number of heat pump installations over the coming years.
• Heat pumps generate full CHMM credits, and hybrid systems generate half credits, which encourages companies to expand their low-carbon product ranges.
• Gas and oil boilers remain fully available. The CHMM does not ban them, restrict their sale, or require households to install heat pumps.
• The scheme is designed to increase supply, improve installer training, and make heat pumps more accessible for purchase, installation, and maintenance.
• Homeowners stay in control of their own timeline. Whether choosing a boiler, hybrid system, or heat pump, the CHMM ensures a more reliable choice and better support across the market.

Why the Clean Heat Market Mechanism Exists

The Clean Heat Market Mechanism is part of a broader effort to reduce energy demand from buildings, enhance energy security, and lower household bills.

The scheme aims to provide the heating appliance industry with a clear and stable framework, enabling manufacturers to feel confident in investing in heat pump supply chains. The goal is to scale up the consumer market for heat pumps, accelerate deployment, and reduce the amount of energy homes need in the first place.

Alongside the CHMM, a substantial package of support is already in place to make low-carbon heating more affordable. VAT on the installation of energy-saving materials, such as heat pumps, is set at zero until 2027. The Heat Pump Ready programme is providing up to £60 million for innovation to bring costs down and make systems easier to install.

The CHMM is designed to work in conjunction with these grants and incentives. Grants help households who choose a heat pump today, while the market mechanism encourages manufacturers to build up their supply, skills, and product choices, making heat pumps a mainstream option for the rest of the decade.

Who Does the Clean Heat Market Mechanism Scheme Apply To?

The CHMM does not apply to individual homeowners. It applies to businesses that manufacture or have others manufacture fossil fuel boilers or heat pumps for them, and that own the brand, trademark, or other distinctive mark used to market these products in the UK.

The guidance divides businesses into three main categories.

Scheme Participants

These are the largest boiler brands and groups. A business counts as a scheme participant in a sales year if it supplies on or for the UK market either:

• 20,000 or more gas boilers that burn natural gas or LPG, or
• 1,000 or more oil boilers.

Small companies, as defined in the Companies Act 2006, are excluded. Scheme participants must register for the CHMM and will receive a formal low-carbon heat target.

Near-threshold Suppliers

These are manufacturers that are close to the main thresholds. A business is a near-threshold supplier if, in a sales year, it supplies:

• between 15,000 and 19,999 gas boilers, or
• between 750 and 999 oil boilers.

Near-threshold suppliers must register and report their boiler sales, but do not receive a low-carbon heat target or CHMM obligation. If their sales rise above the thresholds, they become full scheme participants.

Credit Holders

A credit holder is a supplier of qualifying heat pumps that meet specific criteria. The units must:

• not be able to burn fossil fuels or peat for heat, or only do so as part of a hybrid system
• have a capacity below 45 kW thermal
• provide space heating, with or without hot water, usually through a hydronic (wet) system
• be certified by an approved installation scheme.

Credit holders do not have CHMM obligations because they either do not make fossil fuel boilers or do not sell enough of them to pass the thresholds. They can still earn and hold CHMM credits linked to their heat pump installations.

The scheme runs UK-wide from 1 April 2025 until at least 2029. Scheme years run from 1 April to 31 March, with a separate window for credit transfers. Current guidance outlines four scheme years, from 2025 to 2028, with credit transfer windows that span from October to the following September.

How Do Targets, Credits, and Payments in the Clean Heat Market Mechanism Work?

At the heart of the CHMM is a low-carbon heat target for each scheme participant. The Environment Agency calculates this target using the company’s annual boiler sales data, after verifying excluded sales, supporting evidence, and the verifier’s assurance report.

For the first scheme year, the regulations set the low-carbon heat percentage at 6%. That percentage is applied to qualifying boiler sales above the threshold:

• 6% of qualifying gas boiler sales above 19,999 units
• 6% of qualifying oil boiler sales above 999 units.

The result is the number of CHMM credits the manufacturer must hold and surrender for that year. One credit represents one unit of low-carbon heat against the target. The Secretary of State sets percentage targets for later years, so the level of obligation can rise as the market develops.

How Do Manufacturers Meet Targets?

Manufacturers can meet their target in two main ways:

• by supporting compliant heat pump installations that generate credits linked to their brand, or
• by obtaining credits from other manufacturers, including credit holders that specialise in heat pumps.

There is a formal credit transfer window from 1 October of each scheme year to 30 September of the following year. During this window, scheme participants and credit holders can transfer CHMM credits. Both can carry over up to 10% of their credits into the following scheme year, provided these credits are not already surrendered or transferred. Credits that are not used or carried over by the deadline will expire.

If a scheme participant does not have enough credits to meet its low-carbon heat target, even after any allowed target carry-forward, it must make a payment to cover the shortfall. The Environment Agency issues a notice showing the amount owed, and payments must be made by 30 November after the end of the scheme year.

For homeowners, the vital point is that the obligation and any payments sit with manufacturers rather than individual households. The way manufacturers respond to those obligations, through pricing and product strategy, is what eventually shapes what people see in the market.

Clean Heat Market Mechanism Reporting, Compliance, And Enforcement

To administer the scheme, the Environment Agency requires detailed information on boiler sales and heat pump activity from scheme participants and near-threshold suppliers.

Businesses that fall into these categories must register through the Manage the Clean Heat Market Mechanism online service and report their sales of fossil fuel boilers. Initial registration is based on sales between 1 April 2024 and 31 March 2025.

Once registered, scheme participants and near-threshold suppliers must:

• Monitor fossil fuel boiler sales throughout each scheme year
• Submit quarterly reports on qualifying and excluded gas and oil boiler sales within 28 days of each quarter’s end
• (for scheme participants) Submit an annual sales report with a third-party verifier’s assurance and supporting evidence by 30 June after the end of the scheme year.

They must keep records for at least seven years after each scheme year, including the data submitted and evidence for any excluded sales such as exports or installations in new-build properties.

Who Enforces the Clean Heat Market Mechanism?

The Environment Agency acts as the scheme administrator and has a range of tools to deal with non-compliance. If a business fails to meet its CHMM obligations, the Agency may issue information notices, determinations, and penalty notices. Civil penalties are set out in the regulations, alongside potential criminal penalties for the most serious breaches.

Businesses that disagree with a decision can raise concerns with the Environment Agency and request an internal review. For specific enforcement actions, such as a determination of boiler sales, a decision on liability due to a credit shortfall, or the issue of a penalty notice, there is a formal right of appeal. The General Regulatory Chamber of the First-tier Tribunal hears appeals.

From a homeowner’s perspective, this enforcement framework matters because it underpins the credibility of the CHMM. Manufacturers can only treat the scheme as a serious long-term constraint if there is a clear expectation that data will be verified, obligations will be enforced, and appeals will follow a transparent and legal process.

Scheme Years, Targets, and the Credit System of the Clean Heat Market Mechanism

The Clean Heat Market Mechanism operates yearly, commencing on 1 April 2025, and sets rising expectations for boiler manufacturers over time. The rules don’t apply to households; they only apply to companies that manufacture gas and oil boilers.

How the Scheme Years Work

Each scheme year runs from 1 April to 31 March. Manufacturers report their boiler sales for that year and receive a target for the number of heat pump “credits” they need to collect.

Targets for Each Year

The Government sets a percentage target that tells manufacturers what share of their boiler sales must be matched with heat pump credits.

For the first years, the confirmed targets are:

• 2025–26: 6% of their qualifying boiler sales
• 2026–27: 8% of their qualifying boiler sales

Targets for later years will be announced in advance, and they are expected to rise as the heat pump market grows. Government modelling shows this could mean tens of thousands more heat pumps each year as the scheme progresses.

What A Credit Actually Is

A credit represents one qualifying heat pump installation.

If a heat pump meets the CHMM rules, it earns one credit associated with the manufacturer’s brand.

• Standard heat pump installation = one credit
• Hybrid heat pump (combined with a boiler) = 0.5 credit

Manufacturers need enough credits to meet their yearly target.

How Manufacturers Get The Credits They Need

Manufacturers can do two things:

1. Support more heat pump installations so they generate their own credits.
2. Buy or trade credits from other manufacturers through the official credit-transfer window.

The credit-transfer window runs from 1 October to 30 September of the following year. Businesses can also carry over up to 10% of unused credits into the next scheme year.

What Happens If A Manufacturer Falls Short?

If a company does not have enough credits at the end of the year, it must make a payment in lieu for each missing credit. The current guidance sets this at £500 per missing credit.

This cost is entirely the manufacturer’s responsibility and is not a direct charge to homeowners. How companies respond to those costs, whether through pricing, product choice, or business strategy, is what could influence the wider market.

Part of the Scheme	What It Means	Who It Applies To	Key Points
Targets	A percentage of a manufacturer’s annual gas/oil boiler sales that must be matched with heat pump credits.	Large boiler manufacturers (scheme participants).	Full heat pump = one credit, hybrid system = 0.5 credit. Credits can be traded or carried over (up to 10%).
Credits	Each qualifying heat pump installation creates a credit that manufacturers use to meet their target.	Manufacturers and heat pump suppliers.	Full heat pump = one credit, hybrid system = 0.5 credit. Credits can be traded or carried over (up to 10%).
Payments	A payment made if a manufacturer does not hold enough credits to meet its target.	Only manufacturers with a credit shortfall.	A payment is made if a manufacturer does not hold enough credits to meet its target.

What the Clean Heat Market Mechanism Means for the Heating Industry

The Clean Heat Market Mechanism reconfigures the operations of boiler and heat pump manufacturers in the UK. Although households are not directly part of the scheme, the way manufacturers respond will influence what products appear on the market, how they are priced, and how quickly heat pumps become mainstream.

1. Manufacturers Must Report Everything They Sell

Companies that make large numbers of gas or oil boilers must register for the scheme, track their sales, and report them to the Environment Agency. They must submit:

• Quarterly sales reports for gas and oil boilers, and
• An annual report that an independent verifier has checked.

The Government requires this so targets can be set accurately and monitored properly.

2. Heat Pump Activity Becomes Part Of Their Core Business

Manufacturers must collect enough heat pump credits to meet their targets. Many will start:

• Increasing their heat pump product range
• Investing in training and support for installers
• Expanding the supply chain
• Running promotional offers or partnerships to encourage more installations

The goal is to integrate heat pumps into the mainstream UK heating market, rather than making them a niche option.

3. Credit Trading Becomes A New Part Of The Industry

Companies that install or sell heat pumps can earn credits. Companies that mostly sell boilers need those credits.

As a result, a new credit-trading market will develop. Some heat pump-focused companies may end up selling credits to boiler-heavy companies who need them to meet their yearly target.

4. Stronger Rules And Penalties Keep The Scheme On Track

The Environment Agency is responsible for ensuring that companies comply with the rules. It can:

• Request extra information
• Investigate incorrect reports
• Issue penalties for non-compliance
• Take serious cases to the First-tier Tribunal through the appeals system

The enforcement structure lends credibility to the scheme and prevents companies from ignoring their targets.

5. The Scheme Pushes The Whole Industry Toward Cleaner Heating

Over time, the CHMM is designed to:

• Increase the number of heat pumps available in the UK
• Grow the installer workforce
• Reduce waiting times for installation
• Encourage more competitive pricing
• Make low-carbon heating a routine option when replacing a boiler

This is why the Government sees the CHMM as a long-term market-shaping tool rather than a short-term incentive.

What the Clean Heat Market Mechanism Means for Homeowners

The Clean Heat Market Mechanism doesn’t impose any obligations on households. No one is required to install a heat pump, and gas and oil boilers remain fully available. Nevertheless, the scheme may have a significant impact on the broader heating market in several key ways.

1. Boiler Prices May Change Over Time

Manufacturers that sell a large number of fossil-fuel boilers must also meet their heat pump credit targets. How they respond to that pressure varies:

• Some may invest more in heat pumps and spread the cost across their product range.
• Some may raise the price of certain boiler models.
• Some may focus on promoting heat pumps to reduce their overall credit requirements.

Government documents make it clear that any cost impact is indirect and determined by manufacturers, rather than being set by the scheme itself.

2. Heat Pumps May Become Easier to Buy and Install

Because manufacturers must increase their heat pump activity, the scheme encourages:

• Better stock availability
• Shorter waiting times
• More installer training
• Increased competition between brands

All of this helps normalise heat pumps as a standard replacement option rather than a specialist upgrade.

3. More Choice and Better Support for Homeowners

As companies work to meet their credit obligations, homeowners may see:

• More heat pump brands launching in the UK
• Better aftercare and warranties
• Improved system designs
• Clearer guidance from installers

Manufacturers have a strong incentive to grow the market in a way that makes choosing a heat pump more appealing and practical.

4. Heat Pump Grants and Incentives Remain Available

The CHMM sits alongside existing support schemes, not instead of them.
Homeowners can still apply for:

• Boiler Upgrade Scheme grants
• Local Authority funding
• Energy-efficiency support programmes

These grants reduce upfront costs, while the CHMM increases the supply of suitable products and trained installers.

5. You Can Still Choose a Boiler if That’s What You Prefer

The CHMM does not ban gas or oil boilers, nor does it restrict the type of heating system a household can install. It simply requires manufacturers to balance fossil-fuel boiler sales with investment in low-carbon alternatives.

6. Long-Term Market Changes May Shape Future Decisions

Over the next few years, homeowners may notice:

• More advertising around heat pumps
• Improved hybrid heating options
• New package deals combining insulation, controls, and low-carbon heating
• More competitive pricing as the market scales up

These changes support the government’s long-term goal of reducing energy use in homes and cutting emissions without imposing direct rules on households.

Comparing Systems Under the Clean Heat Market Mechanism Framework

The Clean Heat Market Mechanism changes the way manufacturers balance their product ranges, but it doesn’t change the choices available to homeowners. Gas boilers, oil boilers, hybrid systems, and heat pumps are all still available on the market.

The CHMM simply encourages manufacturers to widen their support for low-carbon heating. Understanding how each option fits within the scheme helps clarify how the market may evolve over the next few years.

Heat Pumps: The Main Focus of the Clean Heat Market Mechanism

Heat pumps are at the centre of the scheme because they play a key role in reducing energy use and emissions. Under the CHMM rules, each qualifying heat pump installation creates a full credit for the manufacturer.

Homeowners choosing a heat pump may see several practical advantages as the scheme matures:

• Wider product choice as more manufacturers enter the low-carbon market.
• Greater stock availability due to stronger supply chains.
• Shorter waiting times because more installers are trained.
• Improved designs tailored for UK homes and heating patterns.
• Better support packages and warranties as competition increases.

Heat pumps remain eligible for grants under the Boiler Upgrade Scheme, and the CHMM reinforces those incentives by increasing supply and lowering long-term costs.

Hybrid Heat Pumps: A Flexible Stepping-Stone Technology

Hybrid systems combine a heat pump with a gas or oil boiler. They are especially useful in homes where a full heat pump may not be the simplest option today due to insulation levels, pipework layout, or heat-loss characteristics.

Under the CHMM:

• A hybrid installation creates half a credit.
• Hybrids provide manufacturers with an additional means to achieve their low-carbon targets.
• More hybrid-ready boilers and package deals are expected to appear.

For homeowners, hybrids offer:

• Lower running costs during milder weather.
• The reassurance of boiler backup on very cold days.
• A smooth path to transition to a full heat pump later.

As the scheme continues, hybrids may become more common, especially in homes that need energy-efficiency improvements before switching entirely to a heat pump.

Gas and Oil Boilers: Still Fully Available

The CHMM does not restrict homeowners from choosing a gas or oil boiler. The scheme places obligations on manufacturers, not households, so boilers continue to be sold as normal.

However, the market may gradually shift as manufacturers work to meet their credit obligations. That shift may include:

• More emphasis on boiler models that pair easily with hybrid systems.
• Greater promotion of “future-ready” boiler designs that link with heat pumps.
• Occasional price adjustments as companies balance the cost of meeting their CHMM targets.

These changes won’t eliminate boilers from the market, but they may shape how brands structure their product ranges over time.

What This Means When Choosing A New Heating System

Homeowners have more flexibility than ever, and the CHMM strengthens that flexibility by expanding the low-carbon side of the market. When planning a heating upgrade, it helps to think about:

• Whether the home is suitable for a full heat pump now.
• Whether a hybrid system would offer a more straightforward next step.
• Whether sticking with a boiler is the right option for the property.
• Whether future insulation or energy-efficiency improvements could change that choice later.

The CHMM ensures that whichever path homeowners take, manufacturers are prepared to support a growing market for cleaner, more efficient heating systems.

Cost Comparisons Under the Clean Heat Market Mechanism Landscape

The Clean Heat Market Mechanism influences manufacturers rather than households, but the way companies respond may gradually shape the price and availability of different heating systems. Understanding how each option compares helps homeowners plan confidently for both short-term needs and long-term running costs.

1. Upfront Cost: Boilers Remain The Cheapest, But Heat Pump Support Is Growing

Gas and oil boilers still have the lowest upfront cost. Most standard replacements fall well below the price of a heat pump, which is why they remain a common choice when a boiler breaks unexpectedly.

Heat pumps cost more to install because they include:

• A larger outdoor unit
• Low-temperature compatible radiators in some cases
• A hot water cylinder, if one isn’t already present
• A detailed heat loss survey

Grants from the Boiler Upgrade Scheme help reduce this gap, and the CHMM encourages manufacturers to expand their heat pump ranges, which is expected to improve pricing over time.

2. Hybrid Systems Sit Between Boilers and Full Heat Pumps

A hybrid system combines both a heat pump and a boiler, resulting in an upfront cost that typically falls in the middle.

Hybrids can be more affordable than a full heat pump upgrade when:

• Only a few radiators need replacing
• The heating system is already efficient
• The property is not immediately ready for a full low-temperature system

Manufacturers may promote hybrids more actively because they generate half a CHMM credit.

3. Running Costs: Heat Pumps Excel In Well-Insulated Homes

Heat pumps use electricity but are highly efficient. A good installation can produce about three units of heat for every one unit of electricity. This is why heat pumps can be cheaper to run than boilers in homes that hold onto heat well.

A heat pump is likely to have strong running-cost performance when:

• The home retains warmth
• Radiators are correctly sized
• The system is running at low, steady temperatures

Hybrids provide part of this benefit by switching between the boiler and the heat pump, depending on the outdoor temperature and demand.

4. Long-Term Ownership Costs

Heat pumps have fewer moving parts than boilers, which can mean lower long-term maintenance costs.

Over a decade or more, a well-designed heat pump system can be more predictable to own than a boiler, which may require parts replacement or repairs as it ages.

Hybrids share this advantage, as the boiler operates less frequently and experiences less wear.

5. How The Clean Heat Market Mechanism May Influence Prices Over Time

The CHMM does not set prices for boilers or heat pumps, but it changes the pressures manufacturers experience. Over the next few years, homeowners may see:

• Increasing competition between heat pump brands
• More special offers and package deals aimed at boosting heat pump sales
• Gradual expansion of installer networks
• Occasional price adjustments to certain boiler models

Different manufacturers may take different approaches. Some may strongly advocate for heat pumps to meet their credit targets. Others may adjust boiler prices slightly to balance their overall position.

6. Grants and Support Help Offset Upfront Heat Pump Costs

The CHMM works alongside existing support, including:

• Boiler Upgrade Scheme grants
• Home energy-efficiency funding
• Local schemes for insulation and heating upgrades

These programmes help lower installation costs, while the CHMM helps expand supply and make heat pumps more accessible.

7. When Each Option Makes the Most Financial Sense

A boiler replacement may suit you if:

• Your current boiler has failed
• The home is not ready for a heat pump yet
• Upfront cost is the priority

A hybrid system may suit you if:

• You want lower running costs without a full system overhaul
• Some insulation improvements are planned later
• You like the idea of a gradual transition to low-carbon heating

A full heat pump may suit you if:

• Your home holds heat well
• You want lower long-term energy bills
• You plan to stay in the property for several years
• You want to take advantage of grants and future-proof your heating

Practical Guidance for Homeowners Planning a Heating Upgrade

The CHMM changes how manufacturers operate, but your heating choices remain entirely your own. Whether you need a quick replacement for a broken boiler or you’re planning a long-term upgrade, a few practical steps can help you choose the right system for your home and budget.

1. Start With A Home Energy Assessment

A simple assessment of how well your home holds heat makes every decision easier. You don’t need a full technical survey at first. Just consider:

• How quickly do rooms cool down
• Whether your home feels draughty
• Whether insulation could be improved
• Whether radiators heat rooms evenly

If the home already feels warm for long periods, it may be ready for a heat pump without major changes.

2. Check Your Current Heating Setup

Understanding what you already have helps narrow down the most suitable upgrade path. Look at:

• Radiator sizes and age
• Whether you have a hot water cylinder
• The location of your boiler
• Available space outside for a heat pump unit

These details help installers advise on whether your property is heat pump-ready or better suited to a hybrid system.

3. Get A Heat Loss Survey If You’re Considering A Heat Pump

A professional heat loss survey removes the guesswork and shows:

• The size of the heat pump needed
• Which radiators need upgrading
• whether any insulation improvements would reduce running costs
• How the system would perform in cold weather

Heat loss surveys have become increasingly common as manufacturers prepare for CHMM targets, and their availability is expected to continue improving.

4. Compare Quotes For More Than One Type Of System

When planning a replacement, request quotes for:

• A like-for-like boiler
• A hybrid system
• A full heat pump (if suitable)

This comparison helps you understand the true cost difference, including potential long-term running cost savings. Manufacturers may also offer promotions or extended warranties as they work to meet CHMM credit targets.

5. Check What Grants or Local Support You’re Eligible For

Alongside the CHMM, support schemes can significantly reduce the upfront costs of heat pumps. Look at:

• The Boiler Upgrade Scheme
• Local authority programmes
• Insulation grants
• Energy-efficiency funding

These programmes can make a heat pump or hybrid system far more affordable than expected.

6. Consider Future Plans For The Property

If you plan to stay in your home for several years, it may make sense to:

• Improve insulation in stages
• Upgrade radiators gradually
• Switch to a hybrid now, with an option to move to a full heat pump later

If you plan to move soon, a like-for-like boiler replacement may be the most practical option.

7. Choose An Installer With Strong Heat Pump Experience

Installer skill has a major impact on system performance. Look for installers who:

• Can provide MCS-certified heat pump installations
• Offer a clear explanation of running costs
• Show evidence of recent heat pump training
• Have experience with both heat pumps and traditional boilers

A well-installed system can outperform a poorly installed one, even with identical equipment.

8. Don’t Rush A Decision Unless Your Boiler Has Broken

If your boiler is still working, you have more time to consider:

• Insulating the home
• Upgrading radiators during renovations
• Comparing systems across several installers
• Planning a long-term shift to low-carbon heating

If your boiler has failed unexpectedly, a quick boiler replacement may be the most realistic option. You can still consider low-carbon upgrades later.

Final Thoughts on the Clean Heat Market Mechanism

The Clean Heat Market Mechanism introduces a new approach to shaping the heating industry, while maintaining homeowners’ control over their own choices. Gas boilers, oil boilers, hybrid systems, and heat pumps remain available. The scheme simply encourages manufacturers to support cleaner, more efficient heating as part of the UK’s long-term energy strategy.

Homeowners mainly benefit from the changes happening behind the scenes. Manufacturers will expand their heat pump ranges, enhance product reliability, train more installers, and make low-carbon systems easier to purchase and maintain. Hybrid options will expand, giving households a flexible step toward cleaner heating without major disruption.

The most important point is that no one is required to change their heating system. The CHMM places obligations only on manufacturers, not households. Its purpose is to ensure the UK has a wider choice of efficient, low-carbon technologies so that when homeowners are ready to make a change, the options available are better, more reliable, and more cost-effective than before.

Overall, the CHMM is designed to build a heating market that works well for the future while keeping today’s decisions in the hands of homeowners.

FAQs on the Clean Heat Market Mechanism

Is the Clean Heat Market Mechanism a Tax on Homeowners?

No. The CHMM places obligations on boiler manufacturers, not households. Homeowners do not pay a fee or surcharge as part of the scheme. Any price movement comes from manufacturers’ commercial decisions, not from a direct tax.

Will Gas Or Oil Boilers Be Banned?

No. Gas and oil boilers remain available. The CHMM does not ban them or restrict what homeowners can install. It focuses entirely on manufacturer behaviour, not household choices.

Am I Required To Install A Heat Pump?

No. Homeowners are not required to install a heat pump under the CHMM. The scheme encourages manufacturers to support the growth of heat pumps, but it does not impose rules on households.

Why Were Heat Pumps Chosen For The Clean Heat Market Mechanism?

Heat pumps are highly efficient and play a crucial role in reducing energy consumption in buildings. They can produce several units of heat for every unit of electricity used, making them an important long-term option for reducing emissions.

What Exactly Is A Clean Heat Market Mechanism Credit?

A credit is created when a qualifying heat pump installation takes place. Manufacturers must collect enough credits to match a percentage of their boiler sales for each scheme year. Homeowners do not manage credits; they exist only within the manufacturer’s system.

Do Hybrid Heat Pumps Count Toward CHMM Credits?

Yes. Hybrid systems earn half a credit each. This makes hybrids an attractive option for manufacturers and installers, particularly in homes that require a more gradual transition to low-carbon heating.

Sources and References

• HM Revenue and Customs – Energy-saving materials and heating equipment (VAT Notice 708/6)
• Department for Energy Security and Net Zero – Heat pump investment roadmap: Leading the way to net zero