‘Soviet’ quotas for heat pumps will fail, warn energy bosses

MINISTERS’ plans to apply “Sovietstyle” production quotas for manufacturers of heat pumps are “anti-free market” and destined to fail, energy bosses have warned.

Mike Foster, the chief executive of the Energy and Utilities Alliance (EUA), criticised government plans to require heating appliance manufacturers to sell a certain proportion of heat pumps relative to gas-fired boilers.

Ministers are trying to increase the uptake of heat pumps as part of efforts to lower the carbon emissions from domestic heating.

However, Mr Foster warned sales quotas would fail given demand cannot be forced, leaving manufacturers unnecessarily penalised.

He said: “I can’t recall an industrial policy that is so anti-free market as the one Whitehall is now proposing. I am shocked that a Conservative [business] minister, Lord Callanan, supports these Soviet-style production quotas for British industry, which take no account of the most basic laws of economics.

“Without demand, firms cannot sell products. And the Prime Minister himself has acknowledged that heat pumps are too expensive at “ten grand a pop”. Yet they are both willing to penalise successful British manufacturers for not selling their quota.”

EUA’S members include heat pump makers such as Mitsubishi Electric and Worcester Bosch.

The Government wants 600,000 heat pumps a year to be installed by 2028, compared with an estimated 67,000 in 2021. In consultation documents, it has said a rising target for sales was a simple way to increase uptake. The Government has also said penalties will “need to be sufficiently substantial to ensure that the policy will be effective”.