Westminster has signed off changes to the Clean Heat Market Mechanism that name the Microgeneration Certification Scheme (MCS) as the single certification route and lift the Year 2 heat pump target to 8% of relevant boiler sales from 1 April 2026. The statutory instrument was made on 18 November 2025, laid on 20 November, and most provisions start in December. The move aims to give manufacturers and installers a clear rulebook for scaling quality-assured heat pumps.

The CHMM already applies UK-wide and runs from 1 April 2025 to 31 March 2029. It obliges manufacturers supplying gas and oil boilers to meet annual low‑carbon heat targets, either by installing heat pumps themselves or by buying credits from others. The Environment Agency administers the scheme and operates a registry for targets, credits and compliance.

Naming MCS as the sole certification scheme tightens quality control and simplifies paperwork. MCS is operated by The MCS Service Company Ltd (company number 07759366) and has long set standards for both products and installers. CHMM credits are issued for certified retrofit heat pump installations recorded in the MCS database and matched into the CHMM registry.

The amendment also clarifies system scope. Installations that provide space heating qualify whether or not they also provide hot water, and hybrid heat pumps remain eligible for half a CHMM credit. That design flexibility matters for flats, small commercial spaces and buildings where hot water is provided separately.

Year 1 obligations were set at 6%. Moving to 8% in Year 2 nudges boiler makers to shift sales portfolios, invest in heat pump stock and deepen partnerships with certified installers ahead of the April 2026 window. Government has confirmed both the 8% level and the single‑scheme approach for certification.

For households, the change should translate into clearer choices and more consistent installation standards. Grants through the Boiler Upgrade Scheme remain available in England and Wales: £7,500 towards air‑source or ground‑source heat pumps, with biomass at £5,000. That support lowers upfront cost and should help convert interest into booked installations this winter and spring.

Installer capacity is moving in the right direction. MCS reports more than 5,250 certified contractors as of March 2025, the highest since the scheme began in 2008. A single certification pathway under CHMM should make it easier for firms to scale training, verification and customer aftercare in time for next spring’s targets.

The scale‑up challenge remains real. The Climate Change Committee estimates 98,000 heat pumps were installed in 2024 (73,000 in existing homes), up 56% year‑on‑year, but the UK’s market share is still around 4%-well behind peers. CCC also flags that electricity remains comparatively expensive versus gas, which blunts running‑cost savings for many households.

Compliance is now clearer too. One certified retrofit equals one CHMM credit (hybrids count for half). Shortfalls are priced at £500 per missing credit, payable by 30 November after each scheme year, with limited carry‑forwards and credit trading available via the registry. Manufacturers should build these parameters into pricing, sales planning and service contracts.

What to watch next: ministers can approve later versions of MCS and must publish any transitional arrangements, so installers should keep an eye on updated standards. DESNZ has also signalled further consultations for later‑year targets, giving industry time to plan while expectations gradually rise.