Are There Government Air Source Heat Pump Grants in the UK?

What Heat Pump Grants Are Available?

There are currently a few schemes throughout the UK. Households can make use of these to either lower the cost of a heat pump installation or cover it in full. Low income households will have more aid available.

The heat pump grants operating throughout the UK are:

• The Boiler Upgrade Scheme

• Home Energy Scotland

• Nest Wales

The Boiler Upgrade Scheme

Originally called the Clean Heat Grant, this scheme is available for people living in England and Wales. It encourages homeowners to change from a gas, electric or oil boiler to a heat pump or biomass boiler. The Boiler Upgrade Scheme (BUS) started operating in April 2022 and will continue to run until March 2028.

Only a certain amount of funding has been set aside, so the scheme works on a first come, first served basis.

The BUS replaced the Renewable Heat Incentive (RHI), which closed to new applicants at the end of March 2022. In terms of heat pump grants, the BUS is one of the most advantageous.

Grant Amounts

The BUS has £450 million of funding, which has been set aside to help homeowners that apply receive a discount on their heat pump installation.

Heat pump grants under the BUS consist of the following:

• £7,500 off the cost of an air source heat pump

• £7,500 off the cost of a ground source heat pump

• £5,000 off the cost of a biomass boiler

The grant amounts were increased on 23rd October 2023, making it more worthwhile to apply. Before this, the amounts were only £5,000 and £6,000. The starting £5,000 off is from the Heat and Buildings Strategy, released in 2021, so larger amounts will only increase uptake.

You cannot apply for the BUS to install a hybrid heat pump. You also cannot apply to replace an existing low carbon heating system. These heat pump grants are designed to replace fossil fuel boilers.

Scheme Eligibility

To apply for the BUS, you need to:

• Own the property

• Be replacing a fossil fuel heating system

• Have a valid Energy Performance Certificate (EPC) with no outstanding recommendations to apply for loft or cavity wall insulation

Put simply, heat pump grants through the BUS can be applied for if you’re a homeowner or a landlord. This still counts if it’s a second property or a business. As long as your insulation is up to scratch, you will qualify.

Unfortunately, you cannot apply for the BUS if you:

• Live in social housing

• Are in a new build property

• Previously had government funding for a heat pump or biomass boiler

How It Works

There are two stages to the scheme. First, the homeowner must apply for the voucher. This takes place before the installation, requiring you to talk to your installer.

Second, heat pump grants need to be approved by the installer after they have confirmed proof of the installation. This will take £7,500 off your final bill.

Home Energy Scotland

As part of the Warmer Homes Scotland programme, Scottish residents can apply for heat pump grants through Home Energy Scotland. All installations are covered by the government and follow an assessment of your property to ensure you receive the work your home needs.

All applications are subject to the availability of Scottish Government funding. In some cases, a contribution may be required. Any loans are managed by Energy Saving Trust, and all installations must be completed by Warmworks approved installers.

What’s Available?

It’s not just heat pump grants that are on offer under this scheme. Depending on the assessment of your property, you could be eligible for:

• Wall or loft insulation

• Draught-proofing

• Gas boiler

• Heat pump

• Solar panels

Rural homes can receive heat pump grants up to £9,000. It’s also possible to apply for an interest-free loan for the remaining amount (up to £7,500), giving you substantial financial aid.

Scheme Eligibility

To qualify for funding for Scottish heat pump grants, the following must apply:

• Be a homeowner or the tenant of a private landlord

• The home is your main residence

• You’ve lived there for six months or more

• Have a poor energy rating

• Have a floor area of 230m² or less

• Your home meets tolerable living standards of the Housing (Scotland) Act 2006

• The council tax band is A–F

• A house member must either be over 75 and have no central heating, or be in receipt of medical certificates, or have at least one of the passport benefits

How It Works

To apply for the scheme, you need to get in touch with Home Energy Scotland and have your home assessed. You can either call 0808 808 2282 or use their online self-assessment tool.

You will be guided through the process, which will include supplementary communication from Warmer Homes Scotland. Heat pump grants can only be applied for in Scotland through this process.

Nest Wales

The Welsh Government’s equivalent for heat pump grants is the Nest scheme. As it currently stands, it’s due for an overhaul from 1st April 2024. This means your home will be assessed for the best energy efficient solution.

Spurred on by the Welsh Government’s decision to reach net zero by 2050, the shake-up will focus primarily on energy efficiency and low carbon solutions. No works will be completed without assessment or permission.

What’s Available?

Heat pump grants are just one of the items available under the new Nest scheme. Your assessed property could be eligible for:

• Wall or loft insulation

• Draught-proofing

• Low carbon heating

• Solar panels

Scheme Eligibility

Similar to the Scottish scheme, you can claim heat pump grants through Nest if the following applies:

• You own or privately rent your home (not through the local authority or housing association)

• Have an energy inefficient home that is expensive to heat

• Receive a benefit or have a chronic condition (respiratory, circulatory or mental health)

How It Works

To find out if your home qualifies for heat pump grants or other energy efficient upgrades, you need to contact Nest on 0808 808 2244. You will be asked about your property to see if you’ll qualify. Even being eligible for loft or cavity wall insulation would help towards a future heat pump installation.

The next stage will include a home assessment, where you will be guided through different options available to you. If you don’t qualify at this stage, you may be given advice about alternative heat pump grants available.

How Much Do Heat Pumps Cost Without Grants?

According to the MCS Installations Database, the average cost of a domestic heat pump throughout last year was £12,804. Coupled with the Boiler Upgrade Scheme, this figure comes down to £5,304, making it much more affordable.

You can see how these figures averaged throughout last year in the interactive graph below.

This means that without heat pump grants, these low carbon systems end up costing from £10,000–£13,000 or more. Ground source systems are much more expensive due to their invasive installation process.

If you need extra insulation, to replace your radiators or upgrade pipework, your heat pump installation will cost much more.

How Much Can You Reduce Your Carbon Footprint With Heat Pumps?

As heat pumps are praised as a low carbon technology, it’s worth investigating just how much you can reduce your carbon footprint by switching to one (with or without the help of heat pump grants). After all, you may be asking if it’s worth switching.

Naturally, all systems are different. Your annual savings depend on several factors as to how much you’ll actually save, including:

• Which system you’re switching from

• Efficiency of your heat pump

• Levels of insulation

• How efficient your previous heating system was

• Central heating age

In the eyes of Energy Saving Trust, the installation of an air source heat pump can save as much as 4,300kg of CO₂ a year. With a more efficient system, this reduces to 1,400kg, but it’s still a decent amount of carbon emissions to remove.

Even though better environmental savings can be made from older systems, you can still make use of heat pump grants with a new (or relatively new) fossil fuel system.

Additional Savings

Whether you qualify for heat pump grants or not, you can still save money on them due to a lack of VAT. Until 2027, VAT for energy efficient products and low carbon heating is at 0%. After this time, it will return to 5%, which gives you a chance to save a further £500–£750.

If you’re ready to enquire about heat pumps, use the button below to be put in touch with local installers. You will receive tailored quotes for your property, and they will discuss whether you qualify for any grants.