Are There Government Grants for Air Source Heat Pumps? Written by Beth Howell Updated on 17 April 2023 ✔ The Boiler Upgrade Scheme cuts the cost of an air source heat pump by £7,500 ✔ The scheme has been extended, and will now end in 2028✔ VAT on heat pumps has been slashed to 0% for the next five yearsTo encourage more people to invest in low-emission heat pumps, the UK government has lowered ground source and air source heat pump costs with grants like the Boiler Upgrade Scheme, which offers £7,500 off the price of heat pumps.Want to hear more about which heat pump grants are on offer, and – more importantly – whether you’ll qualify for them? Scroll down, and we’ll tell you everything you need to know.If you’re ready for a change and would like to compare your options, it’s time to get in contact with local suppliers. Simply pop a few details in our easy-to-use tool, and we’ll get you in touch with experts in the area who will give you free heat pump quotes. What type of central heating do you currently use? Gas boiler Electric boiler Oil boiler Other / not sure Get started UK heat pump grants – at a glance1. The Boiler Upgrade Scheme – provides heat pump grants in England and Wales2. ECO4 – provides heat pump grants in England, Scotland and Wales3. Warmer Homes Scotland – provides heat pump grants in Scotland4. Nest – provides heat pump grants in Wales5. Home Upgrade Grant – provides heat pump grants in EnglandTo receive free, tailored quotes for double glazing, just fill in this quick form and our trusted installers will be in touch. What's on this page? 01 What government grants are available for heat pumps? 02 Octopus Energy’s heat pump grant 03 How much do heat pumps cost without grants? 04 Next steps 05 FAQs What government grants are available for heat pumps?There are currently a number of government grants up for grabs. While most of these schemes provide financial support to cover some air source heat pump costs, others cover all of the cost to help low-income households.So, what schemes are in place to help Brits afford heat pumps? Let’s take a look.GrantPotential savingsWho’s eligible?Boiler Upgrade Scheme£7,500 for an air, ground, or water source heat pumpHomeowners, small landlords, and private landlords in England and WalesECO4This depends on the person’s individual situationPeople who meet certain benefits criteria (see below)Warmer Homes ScotlandThis depends on the person’s individual situationPeople who meet certain benefits criteria (see below)NestThis depends on the person’s individual situationPeople who meet certain benefits criteria (see below)Home Upgrade GrantThis depends on the person’s individual situation, as well as their local council's budgetPeople who meet certain criteria (see below) Loading The Boiler Upgrade SchemeInitially called the Clean Heat grant, the Boiler Upgrade Scheme aims to help people replace their boilers with a more eco-friendly alternative, like heat pumps. The scheme has been extended, and will now run until 2028 (rather than the original 2025 date), after the government published its new Net Zero strategy at the end of March 2023.Despite the benefits of the scheme, 73% of people are not aware of the Boiler Upgrade scheme, according to our National Home Energy Survey. How does it work?With this grant, homeowners in England and Wales are able to get £7,500 off the cost of a new air source heat pump or ground source heat pump.The scheme operates on a first-come, first-served basis, with customers having to rush to register their interest with air or ground source heat pump installers.Overall, this reduces the average air source heat pump costs from £10,000 to £2,500, which is a massive saving.And it means that, according to our calculations, a heat pump for the average household will save you £4,340 compared to a gas boiler, over its lifespan.Unfortunately, the government is dedicating a relatively paltry £450 million to this scheme, meaning a maximum of just 60,000 homes will be able to take advantage of the grant over its first three years – so jump on it while you can. Who’s eligible for the scheme? All homeowners, small landlords, and private landlords in England and Wales are eligible to apply for the grant.However, all applicants must have a valid Energy Performance Certificate (EPC) – typically one which has been issued in the last 10 years – with no outstanding recommendations for loft or cavity wall insulation.When it comes to the installation of the heat pump, there are also a few rules. For starters, homeowners cannot get a grant for a hybrid heat pump system (for example a combination of a gas boiler and air source heat pump).The system you install will also need to meet certain standards, such as minimum efficiency levels (your installer can advise you on these).You'll also need to make sure that the heat pump system’s maximum capacity is less than 45 kWh – anything over won't be eligible for the grant.Homeowners also need to be replacing fossil fuel heating systems, such as oil, gas, or electric, for a heat pump to be eligible for the Boiler Upgrade Scheme grant. How to apply for the Boiler Upgrade SchemeIf you’re interested in applying the Boiler Upgrade Scheme, the good news is that the process is pretty simple – you mostly let the installer do the hard work. The homeowner’s part of the application can be broken down into three simple steps:Contact a suitable MCS-certified installer, who will get you a quote for the heat pump installation. You can find a list of qualified installers on the MCS website Once you’ve chosen an installer, they’ll take you through a few questions to confirm whether you’re eligible for the schemeYou’ll then agree on a quote with the installer, and they’ll begin the installation processOnce you’ve carried out these three steps, the installer will apply for the Boiler Upgrade Scheme on your behalf through the Ofgem website. To give you peace of mind, Ofgem will get in touch with you to confirm that the installer is acting on your behalf. They might also contact you – either by phone or by visiting your property – to check the installation. Once the application for the Boiler Upgrade Scheme has been approved, the value of the grant will be taken off the amount you pay for the installation. Are any properties not allowed to use the grant?Although the Boiler Upgrade Scheme is open to both domestic and non-domestic properties in England and Wales, there are some properties that won’t qualify for the grant.The government states that new-build properties are not eligible for the scheme, with the exception of self-builds that have either been “built mainly using the labour or resources of the first owner” or have never been owned by a business or organisation.The Boiler Upgrade Scheme is also not available for social housing or any properties that have already received a heat pump or biomass boiler installation, funded by the government or an Energy Company Obligation (ECO) scheme.And the property types that are eligible for the scheme need to have an Energy Performance Certificate (EPC) issued in the past 10 years, with no recommendations for loft or cavity wall insulation. Want to get a better idea of what it’s like to own an air source heat pump? Check out our case study with Louise, from South London.Louise had a 12-kilowatt air source heat pump installed to reduce her reliance on fossil fuels, and received £5,000 off the upfront cost through the Boiler Upgrade Scheme. Now, Louise can enjoy a warm, even temperature throughout the house, without fluctuations.Take a look at the full interview with Louise to learn more. What type of central heating do you currently use? Gas boiler Electric boiler Oil boiler Other / not sure Get started ECO4ECO4 is the fourth stage of the government’s Energy Company Obligation (ECO) scheme, and aims to support low-income households who are unable to upgrade their homes and heating systems.One of the key ways the scheme supports people is by replacing old boilers with greener alternatives, such as heat pumps and biomass boilers. The scheme can also provide solar photovoltaics (PV) in all electrically heated homes – but only if a biomass machine or District Heat Network are unsuitable.How does it work?To get support from ECO4, homeowners simply need to get in touch with one of the energy suppliers that are offering the scheme. They’ll then be taken through a telephone assessment, which will cover a few key topics, including income, whether they receive certain benefits, and their property’s energy efficiency rating.The installer will then arrange a date to visit your home and confirm whether it's suitable for the grant.Think you’d benefit from ECO4? Check out Ofgem’s list of energy suppliers to get started. Who’s eligible for ECO4? Since ECO4 aims to support low-income and vulnerable households, one of the main ways companies check eligibility is to see if the applicant receives any of the following benefits:Income-based Jobseekers Allowance (JSA)Income-related Employment & Support Allowance (ESA)Income Support (IS)Pension Credit GuaranteeCredit Working Tax Credit (WTC)Child Tax Credits (CTC)Universal Credit (UC)Housing BenefitPension Credit Savings CreditThe government has stated that anyone with additional Department of Work and Pension (DWP) benefits can get support from ECO4, regardless of whether they receive Universal Credit.This new phase of the ECO grant will also support inefficient social housing and privately rented housing (if the landlord permits it). Warmer Homes ScotlandThe Scottish government’s Warmer Homes Scotland programme offers financial support to low-income households struggling to keep on top of energy bills.How does it work?Households can access the scheme by calling Home Energy Scotland, which will analyse which home improvements should be made. Any eligible households will then be put in touch with Warmworks, the managing agent of the Warmer Homes grant.The scheme covers wall insulation, loft insulation, draught-proofing, boilers and heating, and renewable and micro-renewable heating systems. Who’s eligible for Warmer Homes Scotland? To get a heat pump grant through Warmer Homes Scotland, applicants must:Be a homeowner or the tenant of a private-sector landlordLive in the home as their main residenceHave lived there for at least 12 monthsLive in a home that is no bigger than 230 square metres, with an energy rating of 67 or lowerLive in a home that meets the tolerable living standard set out in the Housing (Scotland) Act 2006Not have received support for energy efficiency improvements through Warmer Homes Scotland funding in the last five years The individual must also be one of the following:A pensioner with no working heating system, who is also in receipt of a passport benefitAged 75 or older, and in receipt of a passport benefitPregnant and/or caring for a child under 16, and in receipt of a passport benefitSomeone with a disability, who is also in receipt of any level of Personal Independent Payment (PIP)Someone with a disability, who is also in receipt of high rate Disability Living Allowance (DLA)Someone with a disability, who is also in receipt of low/medium rate Disability Living Allowance (DLA), and in receipt of an income-related benefitA carer in receipt of Carers AllowanceSomeone who has been injured or disabled serving in the Armed Forces, and is in receipt of Armed Forces Independence Payment/War Disablement PensionSomeone who has an injury or disability from an accident or disease caused by work, and is in receipt of Industrial Injuries Disablement Benefit Nest WalesCreated by the Welsh Government, Nest aims to reduce the impact of fuel poverty in Wales by making low-income homes more energy efficient.How does it work?If a household is struggling to pay energy bills, they can call Nest’s helpline (run by the Energy Saving Trust), which analyses whether they’re eligible for support.If the household meets certain criteria, they will be referred to British Gas, which will then conduct a “whole house assessment” – a property survey that analyses which home improvements should be made.The benefits available under the Nest scheme include:A new central heating systemA new energy-efficient boilerCavity wall insulationExternal wall insulationInternal wall insulationLoft insulationRoom thermostats and heating controlsWater tank and pipe insulationAir source heat pumpGround source heat pumpDraught-proofing Who’s eligible for Nest? If you’d like to get support from Nest, you must:Own or privately rent your home (not from a local authority or housing association)Have an energy-inefficient home that is expensive to heatReceive a means-tested benefit, or have a chronic respiratory, circulatory, or mental health conditionThe means-tested benefits that qualify are:Child Tax Credit (with an income below £16,105 a year)Council Tax ReductionHousing BenefitIncome-based Jobseeker’s AllowanceIncome-related Employment and Support AllowanceIncome SupportPension CreditUniversal CreditWorking Tax Credit (with an income below £16,105 a year) Home Upgrade GrantVarious local councils have been awarded funding under the second phase of the Home Upgrade Grant (HUG 2), which will help them provide energy-efficiency upgrades and clean heating systems to low-income households. The scheme will be running from April 2023 until March 2025, and will provide up to £630 million to different authorities.Want to see whether your council/borough is involved with the scheme? Find a list of the local councils that have been granted funding on the government website. How does it work?HUG 2 will provide councils with 20% of funds as an upfront payment to help them resource and mobilise their projects.There are various checks that councils will need to go through, including a questionnaire about their projects and how they intend to support low-income communities. From the residents’ point of view, if you want to get involved in the scheme, you’ll need to start by checking whether your council is actually involved in the scheme. If they are, they’ll ask you a number of questions to check your eligibility and assess how exactly they can help you. Although some households could be suitable for a green heating system, others might simply need more insulation installed. Who’s eligible for the Home Upgrade Grant? To access the Home Upgrade Grant, you’ll need to:Be living in a low-income household, with a combined gross annual income of under £31,000. Alternatively, the household could be eligible if it is located in an economically deprived neighbourhood (based on data drawn from the Indices of Multiple Deprivation 2019)Be off the gas gridHave an Energy Performance Certificate (EPC) between D and GLive in one of the local authority areas listed (find your council tool)If you think you’d be eligible for the grant, you can contact your local authority for the next steps.Private rented properties are also eligible for the grant – but only if the landlord has four properties or fewer. Landlords are also required to contribute one-third of the total cost of any upgrades. Octopus Energy’s heat pump grantOctopus Energy and Lloyds Banking Group have partnered up, in a bid to make heat pumps more affordable for homeowners around the UK.The pilot scheme has been launched through Halifax – a company owned by the Lloyds Banking Group – as part of its Green Living Reward scheme. Through this initiative, Octopus Energy will provide and install the heat pumps, while Halifax award a £1,000 Green Living Reward – potentially bringing the cost of an air source heat pump below the average boiler if used in conjunction with the government's Boiler Upgrade Scheme.All you have to do to get in on the scheme is Register for the Green Living Reward. You’ll then need to visit Octopus Energy to book your personal heat pump assessment and quote.Renewable Heat Incentive (RHI)In previous years, homeowners could install heat pumps and get paid for the energy they produce by joining the government’s Renewable Heat Incentive (RHI) scheme. The scheme also covered biomass boilers and solar water heating systems.However, this initiative ended in March 2022, and has been taken over by the Boiler Upgrade Scheme. How much do heat pumps cost without grants?Installing a typical air source heat pump costs £10,000.This sounds like a lot, but when you consider that heat pumps typically last for 20 years – twice as long as the average gas boiler – it makes a little more sense.Running costs will vary depending on a number of factors, including the size of your home, how well insulated it is, and what room temperatures you are aiming to achieve.On average though, when you include all the costs, you'll save £4,340 by getting a heat pump instead of a gas boiler.Plus of course, you'll help the climate and avoid costly gas price rises. Next stepsFor a lot of people, the Boiler Upgrade Scheme is the main initiative that will help them afford heat pumps.But if you simply can’t wait, why not get a head start on your research? It’s a good idea to figure out what heat pumps actually are, how to find the best models, and how to get the most affordable options.Luckily, we’ve got everything you need to know waiting for you on our pages below – and if you're already on board, it’s time to get a heat pump for your home. To speed up the process, try using our custom-built tool.All you have to do is provide a few quick details about your property, and we’ll put you in touch with our expert heat pump suppliers, who will send you free quotes to compare.The Best Air Source Heat PumpsAir Source Heat Pump CostsAre Air Source Heat Pumps Worth It? FAQs Can I get a grant to install an air source heat pump? All homeowners, small landlords, and private landlords in England and Wales can get a £7,500 Boiler Upgrade Scheme grant to install an air source heat pump.Be quick, though: there are only 60,000 grants available.If you live in Scotland or Wales and are a homeowner or private renter, you may even be able to get a grant to cover the entire cost of installation, by applying for either Warmer Homes Scotland or Nest Wales. Who qualifies for a heat pump grant? In England and Wales, you just need to be a homeowners, small landlord, or private landlord to qualify for a Boiler Upgrade Scheme grant.To qualify for a Warmer Homes Scotland grant, you must be a homeowner or private renter in Scotland, and receive certain benefits.And if you live in Wales, you can qualify for a Nest grant if you have an energy-inefficient home that you own or privately rent, and receive a means-tested benefit or have a chronic circulatory, respiratory, or mental health condition. Can I get an air source heat pump for free? If you live in Scotland or Wales, you may be able to get an air source heat pump for free.If you qualify for a Warmer Homes Scotland or Nest grant, the authorities in your country will decide how much you should receive.In some cases, they will completely cover the cost of your new heating system, meaning you can get an air source heat pump for free. Do you need bigger radiators with air source heat pump? Most homes in the UK need bigger radiators to get the most out of having an air source heat pump.On average, these households will have to replace one-third of their radiators with versions that are 2.5 times bigger.These larger radiators are the best way to disperse the relatively low heat provided by heat pumps. Written by: Beth Howell Content Manager Beth has been writing about green tech, the environment, and climate change for over three years now – with her work being featured in publications such as The BBC, Forbes, The Express, Greenpeace, and in multiple academic journals. Whether you're after a new set of solar panels, energy-saving tips, or advice on how to reduce your carbon footprint, she's got you covered.