The Clean Heat Market Mechanism (CHMM) went live on 1 April 2025 and now sets a heat pump target rising to 8% of relevant boiler sales for the 2026/27 scheme year (gov.uk, 2025). For heat pump installers, this is not a manufacturer problem happening somewhere else. Every MCS-certified install you register now feeds the credit that boiler makers need.
That single link between your paperwork and their compliance changes how you sell, who you partner with, and why MCS registration matters more than ever. This guide explains CHMM from the installer's chair: what it is, how credits work, and where the demand goes next.
Key Takeaways
- CHMM makes boiler manufacturers match a share of fossil boiler sales with certified heat pump installs, or pay (legislation.gov.uk, 2025).
- The target is 6% for 2025/26 and rises to 8% for 2026/27 (gov.uk, 2025).
- Only MCS-certified installs on the MCS Installation Database (MID) count toward a manufacturer's credits (MCS, 2025).
- The payment in lieu of a missing credit is 500 pounds, down from an original 3,000 pounds (pv magazine, 2025).
- 2025 set a record with over 60,000 certified heat pump installs, up 34% on 2024 (MCS, 2026).
What is the Clean Heat Market Mechanism?
The Clean Heat Market Mechanism is a legal obligation on large boiler manufacturers to match a rising share of their UK fossil boiler sales with certified heat pump installations (legislation.gov.uk, 2025). It started on 1 April 2025 and runs for four scheme years to 31 March 2029, administered through a government registry.
The idea is simple. Government wants more heat pumps in homes, so it puts a market incentive on the firms that still sell most of the gas and oil boilers. A manufacturer either installs enough heat pumps itself, sells them through its network, or buys credits from firms that beat their own target. The mechanism is a nudge on supply, priced in credits.
The design is deliberately technology-led rather than a ban. No one is stopped from buying a boiler, and no installer is forced to change trade overnight. Instead the policy makes heat pumps steadily more attractive for the businesses that shape the market, and it does so with a four-year runway so firms can plan investment and training. From an installer's seat, the practical read is that the companies you buy equipment from now have a standing reason to want your certified heat pump work on their books.
Who does CHMM apply to?
CHMM applies to manufacturers that supply 20,000 or more relevant gas boilers, or 1,000 or more oil boilers, to the UK market in a scheme year (legislation.gov.uk, 2025). Smaller firms sit under a de minimis threshold and carry no obligation, though their sales still shape the wider market.
For the obligated firms, the target bites on volume above the floor. The 2025/26 obligation is calculated on 58% of the gas boilers a participant supplies over the 19,999 mark, then multiplied by the target rate. Installers do not report to the scheme directly, but your registered work is the raw material every obligated manufacturer counts on.
How do heat pump installers generate CHMM credits?
Credits come from real, certified installs. Every heat pump you fit must be registered on the MCS Installation Database (MID) by an MCS-certified installer using certified products, and only those installs generate a valid credit (MCS, 2025). MCS is the sole approved certification scheme for CHMM.
The MID record is the anti-double-counting control. Because each certified install carries a unique database entry, a manufacturer cannot claim the same heat pump twice, and a credit cannot be invented without a genuine job behind it. That is why the scheme leans so hard on MCS registration discipline. Sloppy or missing MID entries do not just risk your certification, they break the credit chain that a manufacturer is relying on.
In the field this raises the stakes on details installers sometimes treat as admin. A commissioning date logged late, a product model recorded wrong, or a job left unregistered because the customer paid cash all sit differently now. Register every certified heat pump promptly and accurately, keep the handover pack complete, and the credit behind it stays sound. Get the heat pump sizing and design right first, because a job that underperforms is the one most likely to draw scrutiny later.
What happens if a manufacturer misses the target?
A manufacturer short of credits pays a set amount for each one it lacks. The payment in lieu was set at 500 pounds per missing credit after government cut it from an original figure of 3,000 pounds following industry pushback (pv magazine, 2025). That figure effectively caps the market price of a credit.
Manufacturers can also trade. A firm that installs more heat pumps than its target generates surplus credits it can sell to a firm that falls short, through the scheme registry (Utility Bidder, 2025). This is where installers gain bargaining power. The more certified installs you deliver for a manufacturer partner, the more compliance value you create for them, and that value is worth discussing when you negotiate supply terms or margins.
A second detail matters for planning. The obligation is annual, so a manufacturer that misses in one scheme year cannot quietly carry the gap forward without cost. That yearly reckoning is why demand for certified installs tends to firm up as each scheme year closes, and why installers with spare capacity in the final quarter often find manufacturers keen to talk.
CHMM targets and thresholds at a glance
The numbers below set the shape of the scheme through 2027. Treat the target rate as the headline figure and the penalty as the ceiling on what a credit is worth to an obligated firm.
- Scheme start: 1 April 2025, running to 31 March 2029 across four scheme years (legislation.gov.uk, 2025).
- Target 2025/26: 6% of relevant boiler sales matched by certified heat pumps (MCS, 2025).
- Target 2026/27: 8% of relevant boiler sales, a 33% step up on year one (gov.uk, 2025).
- Gas boiler threshold: obligation applies above 20,000 relevant gas boilers a year (legislation.gov.uk, 2025).
- Oil boiler threshold: obligation applies above 1,000 relevant oil boilers a year (legislation.gov.uk, 2025).
- Payment in lieu: 500 pounds per missing credit (pv magazine, 2025).
Why is MCS registration now central to CHMM?
MCS registration is the gate. Because only MID-registered installs count as credits, government made MCS the single approved route for CHMM and tied manufacturer compliance to the quality standard installers already work to (MCS, 2025). No MCS, no credit.
In practice this raises the value of certified installers to manufacturers. A boiler maker chasing an 8% target needs a reliable pipeline of certified installs, and it can only source those from MCS-registered firms. If you are weighing certification, or working under an umbrella scheme, CHMM is another reason the badge pays for itself. Our own how to become MCS certified guide walks through the route, and the MCS accreditation overview covers the scheme in full.
What does CHMM mean for installer demand?
CHMM points the whole supply chain toward heat pumps, and the early numbers back that up. Certified heat pump installs passed 60,000 in 2025, a record year and 34% up on 2024, with the UK crossing 250,000 all-time certified installs (MCS, 2026). Government cited that momentum when it judged the 8% target realistic.
Grant schemes still do much of the heavy lifting. Around 43% of 2025 heat pump installs were delivered through the Boiler Upgrade Scheme, and 27% of all installs drew on some form of government funding (MCS, 2026). Pair CHMM demand pressure with grant routes such as the Warm Homes Local Grant and heat pump grants for oil boiler replacement, and the case you make to a homeowner gets stronger. Getting the heat pump sizing right on every one of those jobs is what protects your MID record and your reputation.
How should installers respond to CHMM in 2026?
Treat CHMM as a demand signal, not a distant regulation. The installer base grew 7% in 2025 as firms positioned for this shift, so the competitive window is now rather than later (MCS, 2026). Manufacturers need certified installs, and they will favour partners who register cleanly and deliver at volume.
Three moves matter. Keep MCS certification current and your MID entries accurate, because that is the credit itself. Talk to your heat pump suppliers about how they value certified installs under their CHMM obligation, and ask whether that shows up in pricing, training support or lead referrals. And build a repeatable quoting and design process so you can scale volume without dropping quality.
None of this needs a rush. The four-year runway means the smart play is steady positioning, not a scramble, so pick one or two manufacturer relationships and deepen them. A single system like Reonic can hold that design-to-handover workflow together, though the standards, not the software, are what CHMM rewards.
Frequently asked questions
Is the Clean Heat Market Mechanism a tax on boilers?
No. CHMM is an obligation on large boiler manufacturers, not a direct levy on installers or homeowners. Manufacturers must match a share of boiler sales with certified heat pumps or pay 500 pounds per missing credit (pv magazine, 2025). Any cost passed to boiler prices is a manufacturer decision, not a fixed scheme charge.
Do installers have to register with CHMM directly?
No. Installers do not report to the scheme. Your obligation is to be MCS certified and to register each heat pump on the MCS Installation Database (MCS, 2025). Those MID entries are what generate valid credits for manufacturers, so accurate registration is the whole of your role in the mechanism.
What counts as a valid CHMM heat pump installation?
A valid install is one carried out by an MCS-certified installer, using MCS-certified products, and logged on the MID (MCS, 2025). MCS is the sole approved certification scheme for CHMM, so installs outside that route do not count toward any manufacturer's target and generate no tradeable credit.
How much is a CHMM credit worth?
The payment in lieu of 500 pounds per missing credit sets a practical ceiling on a credit's value, because a manufacturer will not pay more to buy one than to skip it (Utility Bidder, 2025). The traded price sits below that cap and moves with how tight the market is against the target.
Will CHMM increase heat pump work for my business?
The policy is designed to pull demand toward heat pumps, and 2025 already set a record of over 60,000 certified installs (MCS, 2026). CHMM adds a standing incentive for manufacturers to route installs through certified firms, which favours installers who hold current MCS certification and register cleanly.
