Why Boiler Manufacturers Might Start Discounting Heat Pumps

Most coverage of the Clean Heat Market Mechanism (CHMM) is written for installers and boiler manufacturers, not homeowners, which is a shame, because the mechanics of it are actually a decent reason to expect heat pump pricing to move over the next year.

What the scheme requires

The Clean Heat Market Mechanism Regulations 2025 set up a scheme covering the whole UK, running from April 2025 to March 2029 in four scheme years. Any manufacturer selling more than roughly 20,000 gas boilers or 1,000 oil boilers a year has to make sure a set percentage of those sales is matched by low-carbon heat installations, mainly heat pumps, or by buying certificates from a competitor that’s exceeded its own target.

Miss the target and the penalty is straightforward: £500 for every unit of the shortfall, paid to the scheme administrator.

Why the target just got harder

The scheme opened at a 6% target for 2025-26. The government confirmed the target for 2026-27 at 8% in its response to the Year 2 revisions consultation, published 31 October 2025, a jump of roughly a third in the size of the obligation in a single year. Some respondents to that same consultation pushed for the £500 penalty itself to go up too, but the government held it at £500 for now, only noting the calls for a future review.

Industry reporting has estimated the gap between the target and where actual heat pump installation rates currently sit at somewhere around 55,000 units a year, based on current UK boiler and heat pump sales volumes. Worth being clear this figure comes from trade press estimates (Installer Online, reporting industry sales data), not an official government count, so treat it as a rough sense of scale rather than a precise number.

Why this could move heat pump prices

A manufacturer facing that shortfall has three options: sell more heat pumps, buy credits from a manufacturer that’s over-delivered, or eat the £500-per-unit penalty. Buying credits and paying penalties both cost money with nothing to show for it commercially. Selling more heat pumps costs money too, but it comes with a customer and a sale attached, which is why discounting, bundling a heat pump with a boiler purchase, or pushing installer incentives are all more attractive ways to close the gap than writing a cheque to the scheme administrator.

None of this is guaranteed to show up as a lower number on your specific quote. It depends on which manufacturer’s kit your installer is offering, how far behind that manufacturer is on its own target, and how close it is to the October compliance deadline for that scheme year. But the underlying incentive is real and it’s the kind of thing worth asking your installer about directly: whether the heat pump on your quote comes from a manufacturer that’s under pressure to move volume this year.

What this doesn’t change

The Boiler Upgrade Scheme grant that reduces the upfront cost of a heat pump install is a separate government scheme from the CHMM, funded and run independently. See our heat pump page for how that grant currently works. The CHMM operates on manufacturers, not on your installation cost directly, so any effect on pricing would come through your installer’s quote, not through a grant application.

Bottom line

The Clean Heat Market Mechanism was built to nudge the market rather than to hand consumers a discount, but a rising target and a real financial penalty behind it gives manufacturers a genuine reason to make heat pumps more attractive to buy this year. If you’re comparing a gas boiler against a heat pump anyway, it’s worth checking current offers rather than assuming last year’s pricing still holds. See our gas boiler vs heat pump comparison for the rest of that decision, then get matched with vetted installers for a quote.

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