The government has urged the Competition and Markets Authority (CMA) to review the boiler supply market amid fears that a lack of competition is leading to higher prices for landlords and home owners.

Secretary of State for Energy Security and Net Zero, Claire Coutinho (main image), says a study of the home heating appliance market is needed as the sector transitions to low-carbon heating.

“It is more important than ever that consumers can be confident that vigorous competition between companies in the heating market will ensure that they are getting a fair deal, with competitive pressures keeping the prices of heating appliances as low as possible,” she explains in a letter to the CMA.

Market power

“Recent pricing decisions for gas boiler appliances by some manufacturers with considerable market power have called into question whether the market is working as well as it should and leading to good outcomes for consumers,” adds Coutinho.

Last month, ministers shelved plans to introduce a ‘boiler tax’ via the Clean Heat Market Mechanism – binding targets for heat pump installations to ensure that 4% of boiler makers’ sales were made up of heat pumps, with a £3,000 fine for every unit they missed their quota by – until April 2025.

Manufacturers had raised their prices by £120 in anticipation of the new regime.

The targets, part of the government’s clean heat strategy, were drawn up to hasten the phasing-out of gas boilers and deliver 600,000 eco-friendly heat pump installations a year by 2028. However, the National Audit Office has said ministers are optimistic to think this target could be reached, as only 55,000 heat pumps were sold in the UK in 2022.

The CMA has acknowledged the Secretary of State’s concerns and has committed to considering a review in the second half of the year.