How to keep costs low: Heat pump grants explained


How to keep costs low: Heat pump grants explained

Heat pumps are seen as an integral part of our plans to help create a greener future. We are now much more aware of our impact on the environment, with new initiatives and schemes coming into play regularly to ensure we reduce our carbon footprint. This aligns with the UK government’s plans to reach net zero by 2050, an ambitious target that is made more achievable by the introduction of heat pumps into homes across the country. Installing heat pumps can be a costly process for a lot of homeowners, which is why the government has established numerous heat pump grants to help lower costs.

In this article, we will take a look at these grants in more detail, so you’re aware of the support that’s available to you. No matter where you’re based in the UK, these heat pump grants will have you covered.

What heat pump grants are available in the UK?

Whether you live in England, Scotland, or Wales, there are several heat pump grants that are appropriate for you. Let’s take a look at them in some more detail.

Boiler Upgrade Scheme

The Boiler Upgrade Scheme (BUS) was introduced to limit the carbon footprint of homes by creating an initiative that reduces the cost of installing a renewable heating system. The scheme applies to people living in England and Wales and was launched in April 2022.

With the BUS, you’re entitled to:

  • £7,500 off the total cost of having an air source or ground source heat pump installed
  • £5,000 off the total cost of having a biomass boiler installed

Am I eligible for the scheme?

You must meet the following criteria in order to be eligible for the Boiler Upgrade Scheme:

  • Live in England or Wales
  • Own the property you’re applying for
  • Have installed your new heating system on or after the 1st of April 2022
  • Be replacing fossil fuel heating systems (such as oil, gas, or electric)

Even if you’ve already received funding in the past to make your property more energy efficient, you can still apply for the grant without any issues.

You can read more about the Boiler Upgrade Scheme here .

Home Upgrade Grant

The Home Upgrade Grant (HUG) provides up to £750 million of funding for local authorities in England. The funding has been made available to help low-income homeowners improve their energy performance with more efficient upgrades.

The households suitable for funding are decided by each local authority, which means each authority will deliver it slightly differently. The scheme is currently running from April 2023 until March 2025.

Am I eligible for the scheme?

In order to receive the Home Upgrade Grant, you’ll need to meet the following criteria:

  • Live in England
  • Are off the gas grid
  • Have an EPC between D and G
  • Live in one of the local authority areas listed

ECO4 (Energy Company Obligation)

The ECO4 is the fourth installment of the government’s Energy Company Obligation scheme. Having replaced the ECO3 on the 1st of April 2022, it will run until March 2026.

Again, this scheme is designed to help low-income homeowners who are unable to afford to install a heat pump without financial assistance. The ECO4 aims to support people by replacing old unsustainable boilers with greener alternatives – heat pumps and biomass boilers.

Am I eligible for the scheme?

To qualify for the ECO4 scheme, you’ll need to:

  • Have an EPC between D and G
  • Receive government benefits
  • Live in an all-electric home (on and off-gas) where biomass boilers have been ruled out
  • Be a homeowner, landlord, or private tenant

Warmer Homes Scotland

As well as providing funding for other energy-efficiency initiatives, Warmer Homes Scotland is also able to provide heat pump grants. Targeting homeowners in Scotland that struggle to pay their energy bills, this scheme involves an assessor surveying a home to see whether switching to a heat pump system will help to reduce costs.

In most cases, the Scottish government will fund everything. However, more expensive installations may require some contribution from the homeowner. Where this is the case, an interest-free loan can be made available.

Am I eligible for the scheme?

In order to successfully qualify for the Warmer Homes Scotland scheme, you must meet the following criteria:

  • Be a homeowner or tenant of a private-sector landlord in Scotland
  • Lived in your home for at least six months as your main residence
  • Live in a home with a poor energy rating of 64 or lower and have a floor area of less than 230m2
  • Your home must have a floor area of 230m2 or less
  • Live in a home that meets the tolerable living standard set out in the Housing (Scotland) Act 2006. Where the home does not meet the tolerable living standard, it must not impact the effectiveness of the recommended improvements for installation
  • Live in a home where the council tax band is A-F
  • The household must include either a person who is over 75 with no central heating, a person who is in receipt of a DS1500 or BASRiS certificate completed by a medical professional or, a person who is in receipt of at least one of the passport benefits

Home Energy Scotland

Warmer Homes Scotland is part of a broader collective of schemes called Home Energy Scotland. Aimed at ending fuel poverty in Scotland, this scheme offers interest-free loans to pay the costs associated with installing up to two renewable energy systems in your home.

Under the scheme, you could be entitled to up to a £17,500 grant, as well as cashback of up to 75% depending on the type of renewable system you opt for. If you choose to have a heat pump installed, you can also apply for an additional £500 to pay for a heat meter.

Am I eligible for the scheme?

To secure a grant under this scheme, you will need to contact your local council in order to find out whether you’re eligible for an interest-free loan.

Nest Scheme

Provided by the Welsh government, the Nest Scheme offers free advice on home energy improvements and funding to help those that need support with costs, including heat pumps. If you’re eligible, then the full cost of getting your heat pump installed could be covered.

The scheme is specifically aimed at low-income households and people living in deprived communities across Wales.

Am I eligible for the scheme?

You must meet the following criteria in order to qualify for grants under this scheme:

  • Own or privately rent your home (not from a local authority or housing association)
  • Your home is energy inefficient and expensive to heat
  • You or someone you live with receives a means-tested benefit or has a chronic respiratory, circulatory or mental health condition and an income below the defined thresholds

Heat pump grants FAQs

Is financial support available for heat pump installation?

Yes, initiatives like the Boiler Upgrade Scheme are available to help in England and Wales, whereas schemes like Home Energy Scotland are available for residents north of the border. For more information, take a look at our detailed funding and grants explained article.

Will I need to replace my radiators?

This will completely depend on the size of the rooms you need to be heated. For example, if you have an average-sized, well-insulated room, then a standard radiator size should be fine. However, if you have a large, poorly insulated room, then it’s likely you will need to upgrade your radiators so they are bigger.

What are the running costs of a heat pump?

It’s very difficult to give an exact figure for how much heat pumps cost to run, as this will depend on the size of your home, how efficient it is, the type of heat pump you have installed, and your energy usage.

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