Here are the details of funding options available for heat pumps, including the Government’s popular boiler upgrade scheme.
From the 1st of April, 2022 homeowners can apply for grants through the government’s boiler upgrade scheme. The scheme will run in England and Wales between 2022 and 2025.
The government has committed to pay £450 million worth of grants to help install lower carbon heating systems in UK properties.
The boiler upgrade scheme is here to replace the government’s old Renewable Heat Incentive which is no longer available.
The UK government has introduced the Boiler Upgrade Scheme (BUS) to help encourage home and property owners to install lower carbon heating systems in their homes.
The boiler replacement scheme will offer grants to property owners to help pay towards the initial upfront installation cost of the new technology.
The amount of grant you could be eligible to receive will depend on the type of low carbon heating you choose to install in your property.
Types of Heat Pump You Can Get Funding For;
The government funding is available on popular types of heat pump.
| Heat Pump Type | Available Funding Amount | Approx. % of Installation Cost |
| Air Source Heat Pump | £5,000 | 83.33% – 62.5% |
| Biomass Boiler | £5,000 | 33.33% |
| Ground Source Heat Pump | £6,000 | 75.00% – 40.00% |
Funding available under the government’s boiler upgrade scheme:
- £5,000 towards the cost and installation of an air source heat pump
- £5,000 towards the cost and installation of a biomass boiler (only available for properties in rural areas or properties that are not connected to the gas grid)
- £6,000 towards the cost and installation of a ground source heat pump
Here are the types of heat pump available if you’re deciding which is right for you.
Who is eligible for funding?
To be eligible to receive a heat pump grant you must:
- Be living in England or Wales
- Own the property which can be a home or a small non-domestic property
- Private landlords and second homeowners are also eligible
Can you apply for more than one type of funding?
You are eligible to apply for the Boiler Upgrade Scheme even if you have previously been awarded other funding for energy-efficient upgrades to your home like insulation or improving doors or double glazing.
Is my property eligible for a heat pump grant?
If you are living in England or Wales and own your own home or other small domestic property you are likely to be eligible for a heat pump grant as long as your property meets certain requirements.
To be able to take part in the boiler upgrade scheme your property will need:
- An installation capacity of up to 45kWth (kilowatt-thermal, means a unit of heat-supply capacity which is used to measure the potential output from a heating plant. The majority of properties will reach this capacity.)
- An EPC that has no outstanding recommendations for loft or cavity wall insulation
You may be eligible for the Energy Company Obligation scheme (ECO) to improve insulation efficiency in your home if you receive certain benefits or meet the requirements.
Find out more about energy grants.
Here is how to find an existing EPC for your property.
You will only be eligible for one grant per property even if you install multiple units in the future.
Private landlords are eligible for the scheme and it will be up to the landlord whether or not to install a heat pump. Second homes are also eligible for funding under the scheme.
There are some types of properties that are not eligible for a heat pump grant such as
- Social housing
- New build homes (some self builds will be eligible so check)
- Properties that have already received government funding for a heat pump of biomass boiler
Some self- build properties will be eligible for a government grant. To be eligible your self build must have:
- Not be used by a business or organisation
- been built using mostly the labour or resources of the first owner
- You need to be able to prove to your heat pump installer that the property is a self- build through something like the title deeds.
Here’s how to check if you are eligible for the boiler upgrade scheme.
Here are energy saving tips to help make your home cheaper to heat.
How does the boiler replacement scheme work?
You don’t apply for the grant yourself. You will need a heat pump installer to apply to the energy regulator Ofgem on your behalf.
Start by getting quotes for heat pump installation from local installers. Shop around to make sure you are getting the best deal.
When you have chosen your installer they will contact the regulator on your behalf. You will need to confirm to Ofgem that the installer is acting on your behalf.
Ofgem will issue a voucher for your heat pump installation to the installer. They will then have a certain amount of time to complete the work on your property which is generally around three months.
To be eligible for a heat pump grant you will need to use an MCS certified installer – find one here. By using an MSC certified installer you will have proof that your heat pump has been installed to the highest standard and with the correct products.
Here’s where you can find information about Ofgem’s role in the boiler upgrade scheme.
How much Government funding is available?
The government has committed to spend £450million over the next three years to help reduce the cost of low carbon heating technologies and make them more affordable to families across the country.
The funding has the opportunity to help install up to 90,000 heat pumps across the three years. There will be a maximum of 30,000 grants available each year.
Other Government benefits offered for Heat Pumps
Between the 1st of April 2022 and the 31st March, 2027 certain energy-saving materials will be vat free.
In the 2022 budget, the Chancellor cut VAT rates for heat pumps from 5% to 0%.
The rules around VAT relief eligibility were also relaxed. Previously if a heat pump was used for cooling it was not eligible. However, now, a heat pump must simply be capable of heating a home to be eligible for VAT relief.
Grants for ground source heat pumps
Ground source heat pumps are a considerable investment and you want to make sure that you are getting as much government funding as possible to help subsidise this outlay. A ground source heat pump grant could help make the heating system more affordable and a more attractive option.
Are there grants for ground source heat pumps?
Yes, there are currently government grants for ground source heat pumps in the UK. In England and Wales the government have introduced the Boiler Upgrade Scheme which is intended to help with the cost of installing low carbon heating systems into your home.
There is currently a £6,000 grant available towards the cost and installation of a ground source heat pump.
What is the clean heat grant?
The clean heat grant was a government grant which gave you up to £7,000 towards installing a heating system like a heat pump into your home.
The clean heat grant was replaced by the Boiler Upgrade Scheme in May 2022.
What is the social housing decarbonisation fund? (SHDF)
The social housing decarbonisation fund is still being developed so it is likely that details of the fund will be changed.
However, the social housing decarbonisation fund will aim to upgrade large amounts of social housing that has an EPC below C.
The Social Housing Decarbonisation Fund aims to help:
- Tackle fuel poverty
- Reduce carbon emissions
- Create energy-efficient homes
- Create green jobs
It will be up to local authorities to apply rather than individuals.