What funding is currently available in the UK? Here we detail the grants and government schemes currently live.
With the government aiming for a net zero UK by 2050, heat pumps are high on the agenda in the push for a greener future.
Therefore, it shouldn’t be surprising to know that the government provides grants and supports for homeowners looking to have a heat pump installed.
After all, while the government would like to see renewable alternatives replace natural gas boilers en masse, heat pumps are undeniably expensive.
So, what heat pump grants exist and how helpful are they?
Let’s dive in...
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Cost of Installing a Heat Pump
Before we look at UK heat pump grants, it’s important to first look at how much a heat pump installation costs before any grant reductions are applied.
There are two primary types of heat pumps; air source and ground source.
On average, it costs somewhere in the region of £8,000 to £15,000 to have an air source heat pump installed, with the price rising to around £18,000 to £25,000 in the case of a ground source pump.
This cost estimates factor into both the cost of labour and the price of the heat pump itself.
Watch Our Air Source Heat Pump UK Case Study in the video below:
What Heat Pump Grants are Available?
Without further ado, let’s have a look at the heat pumps on offer in the UK.
One grant you may notice is absent is the Renewable Heat Incentive or RHI.
Unfortunately, the RHI was discontinued in 2022 (we’ll discuss this former scheme in more detail later).
Boiler Upgrade Scheme (BUS)
The most notable scheme available in the UK to reduce the cost of a heat pump installation is that of the Boiler Upgrade Scheme or BUS.
The BUS is currently running from 2022 to 2025 and applies only to England and Wales.
The scheme is aimed at supporting households in these parts of the UK seeking to introduce a renewable heating system.
The scheme can be seen as part of the government’s efforts to decarbonise domestic heating in England and Wales.
The scheme offers the following for eligible properties:
£5,000 off the total cost of having an air source heat pump installed.
£6,000 off the total cost of having a ground source heat pump installed.
£5,000 off the total cost of having a biomass boiler installed.
With the government setting aside £450 million for the BUS, it is likely to help approximately 80,000 to 85,000 homes over a three-year period.
It’s important to be aware that you cannot apply for a BUS scheme directly. Instead, you need to hire an MCS-certified installer to fit your heat pump and then they can apply on your behalf.
If their application is successful, they will see £5,000 or £6,000 reduced from the overall cost (depending on which type of heat pump you’ve opted for) before passing the reduction on to you in the form of a lower bill.
Aside from the fact that you must own your home and live in England or Wales to be eligible, it is also necessary that your home have a current Energy Performance Certificate (EPC) and no outstanding recommendations for loft or cavity wall insulation.
Of course, in the case of the latter two points, you could have something done about these issues if you are very keen on having a heat pump installed.
Warmer Homes Scotland
For those located in Scotland, thankfully there is a relevant scheme for you.
Warmer Homes Scotland offers funding to help Scottish households keep warm and lower their energy bills.
In order to successfully use this scheme to reduce the cost of having a heat pump installed, assessors will have to survey your property and ensure that switching to a heat pump will reduce your heating bills.
The extent of the help homeowners may receive will vary on a case-by-case basis.
Among the requirements to be eligible for this scheme, you must either be a homeowner or tenant renting from a private-sector landlord.
Of course, if the latter is the case, you would need permission from your landlord.
Moreover, obviously, you must be based in Scotland. Other requirements apply. If in doubt, you can always contact your local council.
Home Energy Scotland
Believe it or not but there are not one but two schemes worth looking into if you are based in Scotland.
Home Energy Scotland is a broader collective of schemes of which Warmer Homes Scotland is just a part.
Eligible households could receive a loan of up to £17,500 without needing to pay any interest.
You may be able to cover a loan of one or even two renewable energy systems for your home.
Along with a £17.5K loan, you could receive as much as £7,500 in the form of cashback financing.
Moreover, for having a heat pump installed, you can also apply for an additional £500 in loan money to pay for a heat meter.
As with the Warmer Homes Scotland scheme in particular, your local council will be able to provide additional details and give you a sense as to whether or not you are eligible for an interest-free loan.
More heat pump guides:
Nest Scheme (for those in Wales)
If you are living in Wales, you may want to consider the Nest scheme.
The purpose of this scheme is to provide free advice and home energy efficiency improvements.
If you are eligible, you may have the full cost of a heat pump installation covered.
Again, if in doubt, it’s best to consult your local council.
What Happened to the RHI Scheme?
The renewable heat incentive (RHI) scheme ran from 2011 to 2022.
This scheme saw households receive payments based on the amount of low- or zero-carbon energy they would generate.
As mentioned, the scheme was discontinued in 2022.
However, as you’ve seen in this article, many new schemes have taken off recently, although there’s no denying that many will be disappointed to see this scheme discontinued.
Heat Pump Grants FAQs
Will a heat pump pay for itself with time?
Whether or not you can get money taken off the cost of installing a heat pump (or perhaps even an interest-free loan if you live in Scotland), you’ll still likely end up spending many thousands of pounds on having a heat pump installed.
Despite the expense and one which would be especially high in most cases, heat pumps can eventually pay for themselves thanks to their relatively low running costs.
In most cases, where a heat pump does pay for itself, it will take approximately 10-12 years.
Given that heat pumps are expected to last for 10-20 years whether or not a heat pump will pay for itself would depend on your current heating bills and how well your heat pump is maintained.
Moreover, the higher quality of a heat pump, the longer it is likely to last.
Will heat pumps be mandatory in the future?
There are no plans for heat pumps to be made obligatory. However, the government are taking steps to incentivise their use.
Aside from schemes like the Boiler Upgrade Scheme, there are plans to soon mandate that all new build properties are built compatible with low-carbon heating technology such as heat pumps.
Beyond that, it will be illegal for gas boilers to be added to new build properties when this proposed legislation comes into effect.
That is, of course, assuming that the government ultimately votes on this proposed bill.
For now, it remains a government goal that appears likely to happen at some point but we can’t say with confidence when exactly.
It’s possible that decades from now gas boilers will be phased out and heat pumps will be the most popular way of heating homes but we’re still a far cry from that scenario as things stand.
