IF you think the Government is mired in scandal now, wait until it becomes clear how foolish Ed Miliband’s promise is that he will lower household energy bills by £300 a year.
Every policy he has pursued so far promises to do exactly the opposite.
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His attempt to decarbonise the electricity grid by 2030 will cause a massive hike in bills as consumers are forced to stump up billions of pounds of investment in new pylons and other infrastructure.
He has given us no idea of how the grid is supposed to cope with intermittent wind and solar energy without massively expensive energy storage.
His blocking of new oil and gas licences in the North Sea will increase dependence on imports.
At the moment we are being forced to import natural gas by ship from the US and Qatar, which is expensive to transport because it has to be liquified before being transported and then re-gasified when it arrives.
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Now, it is seems that Miliband wants to force up the price of oil and gas boilers, too, by reviving something called the Clean Heat Market Mechanism — or the “boiler tax”.
To be fair to him, he didn’t dream it up. It was the brainchild of the previous government. But at least Rishi Sunak suspended the scheme when he realised how damaging it would be.
Even with a £7,500 grant, heat pumps are still horribly expensive
The CHMM could have come straight out of George Orwell’s Ministry of Truth. It is not really about creating a market, rather about throwing a very large spanner into the workings of the existing market for domestic boilers.
Under the scheme, boiler manufacturers will be forced to ensure that from next April, six per cent of all their central heating installations are electric heat pumps.
Should they fail, they will be liable to pay fines which will have to be passed on to customers, adding £180 to the price of a new gas boiler, according to the industry.
The whole idea was dreamed up because heat pump sales are nowhere near meeting the Government’s lofty ambitions, in spite of buyers being showered with grants worth £7,500 a time.
Last year, installations reached only 60,244, a tenth of government targets for the end of this decade.
There are good reasons why householders are failing to take the bait, in spite of the generous handouts.
Even with a £7,500 grant, heat pumps are still horribly expensive.
The average installation cost for air-to-air heat pumps installed under the so-called Boiler Upgrade Scheme is £13,253.
Not suitable for many older homes
For more efficient ground source heat pumps it is £27,854. By contrast, you can replace your gas boiler for around £2,000.
Even Bosch, which manufacturers heat pumps, has warned the devices are not suitable for many older homes, at least not without investing many thousands more trying to insulate them to modern standards.
If you want to know what will happen with the boiler tax, just look at a very similar scheme for electric cars which came into force in January.
The Zero Emission Vehicle mandate forces car manufacturers to ensure that 22 per cent of the vehicles they sell this year are pure electric.
Should they fail, they will be fined a punitive £15,000 for each vehicle by which they fall short.
The proportion of electric vehicles which must be sold will rise year by year to reach 80 percent by 2030.
For motorists who do not have off-street parking and who rely on public chargers, an electric car can cost twice as much per mile as a petrol one
Yet so far this year only 17.2 per cent of cars sold have been electric — and that is in spite of hefty incentives offered by carmakers as they desperately try to avoid the fines.
Some are now resorting to rationing the sale of petrol and diesel cars until January, so that they can appear in next year’s figures.
As with heat pumps, there are very good reasons why motorists are reluctant to buy electric cars.
The cars themselves cost around half as much again as their nearest petrol equivalent.
If you can charge them at home off-peak, fine.
But for motorists who do not have off-street parking and who rely on public chargers, an electric car can cost twice as much per mile as a petrol one, according to data from ZapMap, an app which helps drivers find chargers.
But the real disparity in cost is far worse. Buy a litre of petrol and half of what you pay is tax.
Electric car-owners, by contrast, just pay VAT at five per cent or 20 per cent, depending on whether they charge at home or with a public charger.
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If electric cars were taxed to the same extent as petrol ones — which one day they surely will be, because the Government is not going to want to give up the £28 billion a year it raises annually in fuel duty — drivers are going to be paying through the nose.
Labour’s assertion that its green policies are going to save us money is a sick joke.
When it sinks in just how much they are costing us, the Government is going to have to face a very sharp reckoning with public opinion.
HEAT PUMP v BOILER COSTS
- Heat pump grant: £7,500
- Average cost of air-to-air pump: £13,253
- Average cost of more efficient pump: £27,854
- New boiler: £2,000
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