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The Complete Guide to Government Grants for Home Improvements

insulation being installed in a loft

The Energy Company Obligation has already helped 2.4 million homes

The Boiler Upgrade Scheme can get you £6,000 off the cost of a new heat pump

Your local council may provide you with free improvements


You should be able to have a warm home and electricity without breaking the bank every month.

Fortunately, there are plenty of government grants that can help you make this a reality, even if you’re struggling financially.

Some grants can give you free insulation and heating systems, while others provide tens of thousands of pounds in interest-free loans, so you can make all the eco-friendly home improvements you’ve also wanted.

In this guide, we’ll walk you through all the best grants for your household, no matter your situation or where in the UK you live.

insulation being installed in a loft

Energy Company Obligation (ECO4)

The government’s flagship project for cutting your home’s emissions is entering a new phase called ECO4, which will last from April 2022 to March 2026.

The scheme for households in England, Scotland, and Wales isn’t technically a government grant – instead, it compels any energy supplier with more than 150,000 customers to deliver energy savings to customers who are on certain benefits or in fuel poverty.

This includes repairing and replacing broken heating systems, upgrading inefficient ones to more environmentally friendly machines, installing solid wall insulation, and providing smart heating controls – all for free.

Free boilers will be less common, though. ECO3 put 134,000 boilers in British homes, but under ECO4, repairs and replacements of boilers will be limited to 5,000 per year.

Suppliers are required to improve households by a certain amount, depending on their Energy Performance Certificate (EPC) rating – and they have to help a minimum amount of the lowest-ranked homes.

Band F and G homes – the lowest rated – must be improved to at least a D rating, while D and E houses must reach at least a C rating.

You can get ECO4 help if you receive any of these benefits:

  • Income based Jobseekers allowance (JSA)
  • Income related Employment & Support Allowance (ESA)
  • Income Support (IS)
  • Pension Credit Guarantee Credit
  • Working Tax Credit (WTC)
  • Child Tax Credits (CTC)
  • Universal Credit (UC)
  • Housing Benefit (new eligible benefit under ECO4)
  • Pension Credit Savings Credit (new eligible benefit under ECO4)

 

Unfortunately, because this edition of the scheme will be more means-tested, some benefits – including many disability benefits – no longer qualify you for help.

You won’t be able to automatically qualify for ECO4 with the following benefits:

  • Armed Forces Independence Payment
  • Attendance Allowance
  • Carer’s Allowance
  • Constant Attendance Allowance
  • Disability Living Allowance
  • Industrial Injuries Disablement Benefit
  • Personal Independence Payment
  • Severe Disablement Allowance
  • War Pensions Mobility Supplement

 

However, you may still be able to access ECO4 – contact your council and ask for their help, as 50% of the scheme’s £4 billion in funding will be handed out by local authorities to households suffering from fuel poverty.

This version of ECO will aim to add to the 2.4 million homes that suppliers have helped so far – but the government has said it’ll introduce a buy-out mechanism soon, allowing suppliers to pay their way out of this obligation, so take advantage while you can.

The Boiler Upgrade Scheme

Also known as the Clean Heat Grant, the Boiler Upgrade Scheme is set to run from April 2022 to March 2025.

It will give homeowners the chance to get a £5,000 discount on a new air source heat pump, and a £6,000 discount on a new ground source heat pump – just contact a supplier, and get them to sort it out for you.

You’re eligible if:

  • You’re a homeowner or small business owner
  • Your property is in England or Wales
  • Your building has been issued an Energy Performance Certificate (EPC) in the past 10 years
  • You follow one of the three EPC scenarios listed below

There are three paths to an eligible EPC, so make sure you follow at least one of these:

  • Your EPC has no recommendations for loft or cavity wall insulation
  • Your EPC does have a loft or cavity wall insulation recommendation, but you fulfil the recommendation between applying for the Boiler Upgrade Scheme and getting a heat pump installed
  • Your property has an EPC or insulation exemption – for example, if you own a listed building

If your property is a custom-built home, it won't need an EPC to qualify.

You may also be able to get £5,000 off the cost of a new biomass boiler, but only if your property is in a rural area with fewer than 10,000 residents, has no mains gas connection, and meets high emissions standards.

The Warm Homes Discount

Every year, between October and March, you can get £140 as a one-off discount on your electricity bill – or your gas bill, if your supplier provides you with both types of energy.

You can qualify for the Warm Homes Discount scheme in one of two ways:

  • You receive Pension Credit Guarantee Credit
  • You are in, or at risk of falling into fuel poverty

If you receive Pension Credit Guarantee Credit, you should automatically get £140 off an energy bill. If you’re in or nearly in fuel poverty, contact your supplier about the discount.

The Winter Fuel Payment

If you were born on or before 26 September 1955, the government may give you between £100 and £300 to help you with your heating bills.

You’ll automatically receive this payment in November or December if you either:

  • Receive the State Pension
  • Receive a different social security benefit – but not the Housing Benefit, Council Tax Reduction, Child Benefit or Universal Credit

If the payment doesn’t arrive, check you match the couple of other criteria, then file a claim yourself.

The Smart Export Guarantee

The Smart Export Guarantee isn’t a grant, but it has the same effect of cutting your energy bills.

Since January 2020, the government has compelled energy suppliers with more than 150,000 customers to pay households for the renewable energy they export to the National Grid.

You can qualify for this scheme if you generate power with any of the following:

  • Solar photovoltaic panels
  • Wind
  • Micro combined heat and power
  • Hydro
  • Anaerobic digestion

Suppliers must pay you any amount above zero for your extra energy. The current top rate is Octopus’s 7.5p per kWh, which can net the average household £411 per year.

The Disabled Facilities Grant

Your local council can give you a grant to adapt your home for a disabled occupant. Just check who your local council is, then apply on that council’s website.

Changes can include:

  • Wider doors
  • Ramps
  • A stairlift
  • A downstairs bathroom
  • A heating system that better suits your needs
  • Heating or lighting controls

The Electric Vehicle Homecharge Scheme

The Electric Vehicle Homecharge Scheme was launched in April 2020 for homeowners – but from April 2022 onwards, it’s only available to renters and people who own flats.

If that’s you, you can get 75% off the cost of buying and installing a home charger for your electric vehicle, up to £350.

Just make sure you:

  • Have one of the 238 vehicles on the eligible vehicles list
  • Are the vehicle’s primary owner
  • Can prove you already have an eligible vehicle, or have purchased one that will be delivered within four months of the charger’s installation date

Grants from your local council

Many local councils around the UK can offer additional grants for different reasons.

For example, the Bournemouth, Christchurch, and Poole Council offers a cavity wall and loft insulation grant to homeowners and renters who are vulnerable, low-income, or have health risks.

In Newcastle, you can apply to the local council’s Sustainable Warmth scheme for a grant to install improvements including loft and wall insulation, heat pumps, and solar panels.

And if you live in London and are vulnerable or over 60, you may be able to receive up to £5,500 in Warmer Homes funding, to make heating, insulation, and ventilation improvements to your property.

Home Energy Scotland Loan advert with mascot

Home improvement grants for Scotland

Home Energy Scotland Loan

Since launching in May 2017, the Home Energy Scotland Loan has helped thousands of homes to buy energy-efficient measures and renewable systems.

The government is giving interest-free loans of up to £38,500 to homeowners who want to make their households more energy efficient or eco-friendly.

You can apply for loans for two kinds of installation: energy-efficient improvements, which can net you a loan of up to £15,000, and up to two renewable systems or connections to a renewable district heating system, which can get you a loan of up to £17,500.

You can also receive a loan for up to £6,000 for an energy storage system, which is included in the renewable system category.

The loans can be paid back over as many as 12 years, and you may not have to pay back the full amount.

Up to 40% of the cost of your energy-efficient improvements or the entire loan for them – whichever is lower – may be provided through cashback funding. This cashback offering rises to as much as 75% when it comes to paying for your renewable system.

Home improvement grants for Northern Ireland

Affordable Warmth Grant

If you’re a homeowner or private renter, you have problems with your heating or insulation, and you earn less than £23,000 per year, you may be able to get a grant of £7,500 – or up to £10,000 if your home requires solid wall insulation.

You can get in contact with the authorities to check if you qualify for the grant.

Boiler Replacement Scheme

If you earn less than £40,000 per year and have a boiler that’s at least 15 years old and runs on gas, LPG, or oil, you may be eligible for the Boiler Replacement Scheme.

This grant enables you to replace your old boiler with a new, efficient gas, oil, or wood pellet boiler.

Home improvement grants for Wales

Home Improvement loans

If you’re struggling to pay for crucial replacements or repairs to your home, you may be able to access up to £35,000 in interest-free loans from the government.

Each local council in Wales creates their own eligibility criteria and asks for an administration fee of up to 15%, but it may well be worth it.

Just enter your postcode on this Welsh Government site, and see what your council offers.

Nest

This Welsh Government scheme attempts to reduce fuel poverty rates by helping low-income households to become more energy-efficient.

All you have to do is call Nest’s helpline, and if you qualify, British Gas will assess your home and recommend specific improvements.

Through Nest, you can get free eco-friendly improvements including a new energy-efficient boiler, wall and loft insulation, and draught-proofing – or even a heat pump.

If you want to get support from Nest, you have to:

  • Own or privately rent your home
  • Have an energy-inefficient home with high heating bills
  • Receive a means-tested benefit or have a chronic respiratory, circulatory, or mental health condition

 

The means-tested benefits that qualify are:

  • Child Tax Credit (with an income below £16,105 per year)
  • Council Tax Reduction
  • Housing Benefit
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Pension Credit
  • Universal Credit
  • Working Tax Credit (with an income below £16,105 per year)

Grants that no longer exist

Green Homes Grant

The Green Homes Grant was meant to be a £2 billion, 18-month programme to cut the costs of making your home energy-efficient.

It was launched with the idea of helping 600,000 homeowners to cover two-thirds of the cost of eco-friendly home improvements, up to £5,000.

But after a rollout that was heavily criticised by the National Audit Office and which Greenpeace UK called “shambolic,” the scheme was abruptly cancelled just six months in.

Only 47,500 homes were helped – a mere 7.9% of the initial target – and 86% of people said they had a poor experience with the scheme.

Parliament’s Environmental Audit Select Committee said the grant had been “poorly implemented, beset by administrative problems and delays which fundamentally jeopardise delivery of the scheme’s ambition.”

If the government had designed, promoted, and run the scheme properly, it could have protected hundreds of thousands of homes against energy bill rises – but it didn’t.

Renewable Heat Incentive

The Renewable Heat Incentive (RHI) ended in March 2022.

This scheme subsidised the running costs of biomass boilers, heat pumps, and solar water heating.

If you owned one of these systems, the government would send you quarterly payments for seven years, based on the amount of electricity your machine was estimated to generate.

The last RHI tariff was 10.92p per kWh, which compared favourably to the top Smart Export Guarantee rate of 7.5p per kWh.

However, even this wasn’t enough to make heat pumps – the most popular eco-friendly heating system – cost-effective.

That’s why the government replaced the RHI with the Boiler Upgrade Scheme, which will provide homeowners with grants of £5,000 or £6,000 to buy a heat pump.

The Feed-in Tariff

The Feed-in Tariff wasn’t a grant, but this government initiative fell into the same area, as it paid homes for the electricity they generated from renewable sources.

Homeowners could also sell any electricity they didn’t use to the National Grid.

The Feed-in Tariff was a massive success. From the start of the scheme in 2010 to 2017, the UK’s renewable energy capacity increased fourfold, from 9.3 gigawatts to 38.9 gigawatts.

The Feed-in Tariff ended in 2019, but anybody who signed up before the deadline will still receive payments until their contract – which was usually 20 years long – expires.

The government cancelled the Feed-in Tariff because it wanted to concentrate on more commercial, high-impact solar programmes.

Plus, solar panel costs have fallen by 25% since 2014, which means there wasn’t as much need for subsidies – especially with the subsequent introduction of the Smart Export Guarantee.

Summary

You’re now in a fantastic position to take advantage of all the government grants you can.

This will help you to cut your energy bills, reduce your carbon footprint, and ensure that you have a home where you can feel warm, safe, and secure.

And if these grants have inspired you to take a further step towards eco-friendly energy efficiency, we would recommend solar panels.

If you’d like to join the hundreds of thousands of UK homeowners generating solar energy, it’s never been easier to compare prices.

Just enter a few quick details in our easy-to-navigate tool, and our expert installers will be in touch with free quotes for you to compare.

josh jackman
Josh Jackman Senior Writer

Josh has written about eco-friendly home improvements and climate change for the past three years. His work has featured on the front page of the Financial Times; he’s been interviewed by BBC Radio; and he was the resident expert in BT’s smart home tech initiative.

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