Heat pumps still make up a small fraction of the world heating market. Only 5% of the world’s heating comes from heat pumps, but that number is expected to grow as awareness of their benefits increases.
So, why is the article even needed anyway?
It’s simple. The vast majority of countries are transitioning away from fossil fuels to renewable energy, and that includes using heat pumps for heating. In fact, the UK is cancelling all installation of gas boilers from 2025 onwards in new homes.
That’s a huge change, and it means that people will be looking for alternatives to gas boilers. Air source heat pumps are one of the most popular alternatives, but they can be expensive to install. Hence, why governments are now offering different grants to encourage people to switch.
So, if you’re thinking of switching to an air source heat pump, then you may be able to get a grant to help with the cost.
In this article, we’ll be looking at all of the subsidies, heat pump funding, and green grants to replace gas and oil boilers.
What Government Grants are Available For Air Source Heat Pumps?
There are a few different types of government grants available for air source heat pumps. Some cover the financial cost to cover some of the cost of air source heat pump installation while others offer assistance to low-income households.
To be honest, if the government didn’t offer these types of subsidies and grants for green technology, the switch away from fossil fuels would be a lot slower.
Please note that there are different schemes available for different parts of the UK.
England and Northern Ireland have:
- The Boiler Upgrade Scheme (BUS)
- Energy Company Obligation (ECO)
- Renewable Heat Incentive (RHI) (No longer available)
- Green Homes Grant (Closed)
- Home Energy Scotland Loan
- Warmer Homes Scotland
- The Private Rented Sector Landlord (PRSL) loan
- The Boiler Upgrade Scheme
- Energy Company Obligation (ECO)
Related: Heat Pump Statistics
So what help and assistance are available for air source heat pumps?
The Boiler Upgrade Scheme
How does it work?
You can now apply for a Boiler Upgrader Scheme grant to receive up to £6,000 off the purchase price of a heat pump.
The Boiler Upgrade Scheme is now open to help homeowners in England, Northern Ireland and Wales pay for the upfront fees of installing a heat pump.
The £450 million plan provides up to £5,000 for homeowners who want air source heat pumps and up to £6,000 for ground source heat pumps. However, just bear in mind that only 90,000 homes are expected to benefit.
The initiative is part of more than £3.9 billion in funding promised in the Heat and Buildings Strategy, which was launched last year to assist consumers to reduce carbon emissions from their houses.
The proportion of carbon emissions in the UK that is produced by heating our houses is about 14%, according to the Committee on Climate Change (CCC), and the Boiler Upgrade Scheme will be a key enabler for the UK to reach its 2050 net-zero goal, as well as ensuring that all new heating system installations are low-carbon by 2035.
How will the boiler upgrade scheme work?
The Boiler Upgrade Scheme, previously known as the Clean Heat Grant, is a government program that provides matching funds for clean-heat technology and works similarly to the Green Homes Grant.
The government contributes a set amount toward the cost of a renewable heating system.
The government is prioritizing those who meet the criteria. The program began on April 1, 2022, with eligible low-carbon heating systems receiving support after that date. On May 23, 2022, the scheme for funding applications and payments opened.
How much funding can I receive?
Grants of £5,000 are available for the purchase of air source heat pumps and biomass boilers, while grants of £6,000 are available for ground source heat pumps.
According to the government, a “higher grant level in proportion to overall cost has been set for ASHPs given that the majority of existing properties are suitable for this technology.”
Because the funding comes from grants, if expenses exceed the amount provided, homeowners are responsible for any additional money needed.
How to apply
MCS-certified heat pump installers may be contacted by interested parties to arrange a quote for the installation and submit an application on their behalf. The grant’s value will be deducted from the cost you pay.
We recommend getting multiple quotes to ensure you’re receiving the best value for money. The installer will lead the voucher redemption, verify the installation, and process the completed paperwork.
When you’re notified by Ofgem that the installer has contacted you, you’ll need to confirm that they are working on your behalf.
Which heating systems are eligible?
The following types of heat pumps are supported:
- Air source heat pumps
- Ground source heat pumps
- Water source heat pumps (which the government considers in the same tech category as GSHPs)
Biomass boilers are only available in rural areas with populations of 10,000 or less. They aren’t accessible to people in metropolitan areas.
To install a biomass boiler, your property must also satisfy strict emissions criteria set by the government “to mitigate any negative impact on air quality.”
Eligible systems include those with a capacity of up to 45kW.
Homeowners need a valid Energy Performance Certificate (EPC) to apply to the Boiler Upgrade Scheme (Image credit: Tim Pullen)
Related: A Guide To Heat Pump Prices
How long will vouchers last?
Applicants must have a specified validity period to assure that the vouchers are utilized as intended and those unusable ones may be recycled.
Vouchers for Ground source heat pumps have a three-month validity, while coupons for air source heat pumps and biomass boilers have a six-month validity.
Who is eligible to apply?
A grant is available to all homeowners, small landlords, and private landlords in England and Wales. However, all applicants must have a valid Energy Performance Certificate (EPC), which is usually one that has been granted in the last ten years.
There are a few things to keep in mind when it comes to ensuring that your EPC is eligible. Firstly, you must have no outstanding loft or cavity wall insulation recommendations on your file. If you do, you’ll need to insulate your home before applying for the program.
If your property has an EPC insulation exemption, you may continue with your application.
Who is not eligible?
Those living in social housing or new properties are not eligible, as is the case with many green initiatives. Furthermore, you can’t participate in the program if your home already has a low-carbon heating system.
Only houses that are entirely replacing old fossil fuel systems (such as oil, gas, or direct electric) are qualified for assistance, according to the government.
What about self-builders?
If you’re a self-builder, you’re in luck. BUS may help you upgrade the boiler in your custom or self-built home. Custom and self-builders have a three-month validity period to complete their installations, and they will not be required to submit an EPC to verify insulation eligibility.
Which systems are not covered?
Installations that provide space and water heating in buildings receive support, however, the grant excludes:
- Hydrogen boilers (which aren’t expected to be available by the time the scheme ends)
- Hybrid heat pumps
Solar thermal systems are not covered by the scheme, but they may be put in place as part of a heat pump or biomass system that is paid for through the program, provided that the heating system can fulfill all of the home’s space and water heating demands.
How long will it run?
The Boiler Upgrade Scheme will run from April 2022 until April 2025.
Warmer Homes Scotland
The Scottish government’s Warmer Homes Scotland initiative provides funding and assistance to people who are having difficulty keeping their homes warm and on top of energy bills.
Calling Home Energy Scotland will determine what aid is accessible and connect qualified households with Warmworks, the management agent.
Who is the programme for?
The Scottish Government is providing help to homeowners and private sector renters who are unable to heat their homes due to a lack of money or fuel and have lived in them for at least 12 months.
What’s available through the programme?
The improvements that may be made will be determined by a survey of the property. Assessors will visit your property to assess it and offer improvements suited to it, such as insulation and heating.
In most circumstances, the Scottish Government will pay all expenses. Please keep in mind that funding cannot be used for work that has previously been completed.
All home improvements financed by Warmer Homes Scotland must be supervised by an authorized contractor.
Customer contributions are sometimes required for more expensive enhancements, such as solid wall insulation.
To help cover the expenses of the client’s contribution, an interest-free loan is available from the Energy Saving Trust.
The loan, which is handled by the Energy Saving Trust, will be subject to a credit check and may include an administration fee if your bid includes a customer contribution.
If your offer includes a customer contribution, additional information on the loan, including the terms and conditions, will be given to you.
Potential improvements include:
- Wall insulation
- Loft insulation
- Central heating (inc. new gas boilers)
How does it work for private tenants?
The Scottish Government will inform your landlord about the upgrades that can be funded by the Scottish Government and those that they may be required to fund directly.
Prior authorization is needed for any improvements to be made.
Since 1 August 2017, the improvements available under Warmer Homes Scotland to individuals who reside in privately rented housing have been restricted.
Private Rented Sector homes covered by the legislative Repairing Standard will no longer be entitled to repairs that a landlord is obligated by law to offer.
Customers who meet the eligibility criteria for other upgrades accessible via the scheme will be eligible to obtain them.
Customers who are advised for the property may still receive additional improvements if they qualify, according to program rules. For further information, contact a consultant.
Who is eligible?
The eligibility criteria is summarized below.
If you do not qualify for Warmer Homes Scotland, you may be able to receive assistance through the interest-free loan program or area-based schemes in your region. And if you’ve read the criteria but are still unsure, don’t hesitate to contact us – we’re here to assist.
How to apply
Simply call them on 0808 808 2282 or fill out the contact form and one of their representatives will get in touch with you.
A Warmworks Scotland agent will then walk you through the process.
The Welsh Government Warm Homes program, which includes Arbed and Nest projects, provides financial help for low-income households and disadvantaged communities in Wales to make energy-efficient improvements.
It supports the Welsh Government’s commitments to:
- reduce climate change
- help eradicate fuel poverty
- boost economic development and regeneration in Wales
How does it work?
If a family is having trouble paying their energy bills, they may contact the Energy Saving Trust’s Nest helpline (operated by the Energy Saving Trust) to see whether they qualify for assistance.
If the household meets specific criteria, they will be referred to British Gas, which will carry out a “whole house assessment” – a property survey that assesses whether any improvements should be made throughout the house.
The benefits available under the Nest scheme include:
- A new central heating system
- A new energy-efficient boiler
- Air source heat pump
- Cavity wall insulation
- External wall insulation
- Ground source heat pump
- Internal wall insulation
- Loft insulation
- Room thermostats and heating controls
- Water tank and pipe insulation
Who’s eligible for Nest?
If you want to get help from Nest, you must:
- Have an energy inefficient home that is expensive to heat
- Own or privately rent your home (not from a local authority or housing association)
- If you qualify for a means-tested benefit or suffer from a long-term respiratory, circulatory, or mental health condition, you may be eligible.
The means-tested benefits that qualify are:
- Child Tax Credit (with an income below £16,105 a 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 a year)
Are There Special Heat Pump Grants For Pensioners?
Storage Heater Grants for Pensioners from the Government’s ECO Scheme
The government-backed, financed program called the Energy Company Obligation (ECO) scheme enables pensioners to receive home improvement subsidies regardless of whether they are homeowners or renters.
Home insulation grants, such as loft, underfloor, and wall insulation, are available through the program.
It also offers money for conserving energy by repairing, replacing, or installing more energy-efficient heating systems.
The types of grants available to pensioners include:
- People who live in homes with old, inefficient heating systems can get grants for replacement. There is also assistance for the full cost of installing central heating, which includes installing radiators, but only if the home has never had central heating before.
- Underfloor or wall insulation is also eligible for government grants. Individuals who wish to install loft insulation, underfloor, or wall insulation are entitled to grants.
- In some regions, smart thermostat grants are available and they will pay for the installation of smart thermostats that can help you to manage your heating from your phone and reduce energy consumption.
How ECO works
Medium and larger energy suppliers under the ECO initiative finance home energy efficiency upgrades.
Each obligated supplier has a total target that is calculated based on its proportion of the overall British household energy market.
The obligated energy suppliers collaborate with installers to implement efficiency improvements such as loft or wall insulation, as well as heating.
The ECO4 program consists of one major obligation: the Home Heating Cost Reduction Obligation (HHCRO).
You are eligible for the ECO discount if you are a core group customer under the Warm Home Discount Scheme or you obtain at least one of the following benefits and satisfy the necessary income requirements, where applicable:
- Child Benefit
- Housing benefit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Pension credit saving credit
- Pension Guarantee Credit
- Tax Credits (Child Tax Credits and Working Tax Credits)
- Universal Credit
You can apply for an ECO grant here.
Are There Special Heat Pump Grants For the Disabled?
Yes, disabled facilities grants also provide funding for central heating. However, this sort of grant isn’t just for central heat; it also covers a variety of modifications to residences made by the disabled.
These include changes such as:
- Adapting lighting and heating controls for easier use
- Improving central heating systems
- Installing downstairs bathrooms for easier access
- Stairlift installation
- Widening doors and installing ramps
You can apply for an ECO grant here.
How Much Do Heat Pumps Cost Without Grants?
Installing a standard heat pump system costs between £10,000 and £13,000. A lot more expensive than installing a gas boiler, right?
But when you consider that heat pumps typically last 20 years (twice as long as the average gas boiler) – it starts to make sense.
Now, running costs will vary depending on a variety of variables, including the size of your property, its insulation levels, and the desired room temperatures.
When you include all expenses, on average you’ll save £100 by switching to a heat pump rather than a gas boiler.
How Much Money Can You Save With Heat Pumps?
The amount of money you’ll save by switching to heat pumps will be determined by the energy system that you’re replacing.
To give you a better idea, we’ve drawn up a chart with how much money you might save if you switched from various energy systems.
These numbers are based on the installation of a standard air-source heat pump in an average four-bedroom detached house in England, Scotland, or Wales.
How Much Can You Reduce Your Carbon Footprint With Heat Pumps?
Air Source Heat pumps in a residential area can save almost 2 tonnes of carbon each year, reducing CO2e by up to 70% and contributing up to 20% less CO2e than gas boilers.
In this article, I've outlined who is eligible for a government air source heat grant, what types of grants are available, and how much you can expect to save by making the switch to a heat pump.
If you have any questions or would like to learn more about heat pumps, feel free to leave a comment below or contact us today.
We'd be happy to help!