Heat Pump Grants and Incentives Expand Across the UK

Government-backed financial support for heat pump installations is available across the UK, aiming to increase adoption of low-carbon heating systems. These incentives are part of broader efforts to reduce emissions and improve energy efficiency in homes.

Heat pumps operate by transferring heat from external sources such as air, ground, or water into buildings using electricity, and are considered more efficient than traditional boilers. The Boiler Upgrade Scheme in England and Wales allows homeowners to apply for grants of up to £7,500 for air-source or ground-source heat pump installations, with the scheme extended until March 2028.

In Scotland, the Home Energy Scotland programme provides up to £15,000 in support, combining a £7,500 grant with an interest-free loan of the same amount. Additional funding is available for remote or rural homeowners, who may qualify for grants up to £9,000 plus a £7,500 interest-free loan to assist with installation costs.

Low-income households across the UK can access the Energy Company Obligation (ECO4) scheme, which covers the full cost of heat pump installations and other clean energy upgrades. In Northern Ireland, the NISEP scheme offers up to 100% funding for heat pump installations for qualifying low-income households, with partial support available for others.

What the numbers show

• Applications for the Boiler Upgrade Scheme rose by 39% in January 2024 compared to January 2023
• Over £133 million in vouchers have been issued through the Boiler Upgrade Scheme
• Since April 2022, 62,031 vouchers for £7,500 heat pump grants have been distributed in England and Wales
• The UK government has a target of 600,000 annual heat pump installations by 2028, but fewer than 100,000 were installed in 2024

To further encourage uptake, domestic heat pump installations are exempt from VAT until March 2027. Planning regulations were also amended in May 2025, removing the requirement for heat pumps to be installed at least one metre from property boundaries, making the process simpler for homeowners.

Despite these measures, the number of heat pump installations remains below government targets. Factors contributing to limited uptake include complex application procedures, energy performance criteria, high upfront costs, and a shortage of qualified installers.

Advertising standards have also been enforced in relation to heat pump grants. The Advertising Standards Authority banned two adverts for suggesting automatic eligibility for the £7,500 grant without clarifying the necessary criteria.

The UK government continues to promote heat pump adoption through a combination of grants, loans, regulatory changes, and tax incentives. These policies are intended to support the transition to low-carbon heating and help meet national emissions reduction goals.

* This article is based on publicly available information at the time of writing.