Air Source Heat Pump Grants UK

Last updated: May 22, 2024

UK homes can benefit from the massive support by the government towards the cost of buying and installing air-source heat pumps and other renewable and energy-efficient technologies such as solar panels.

According to the International Energy Agency, the air-source heat pumps have the potential to supply more than 90 per cent of global space and water heating.

However, they currently account for only 5 per cent of the world’s heating.

The UK government has taken many initiatives to encourage Brits to replace traditional gas boilers with air-source heat pumps and introduced various grants for this purpose.

The following UK heat pump grants are available or will be available later:

  • Domestic RHI.
  • Boiler upgrade scheme.
  • Warmer Homes Scotland.
  • Home Energy Scotland Loan.
  • Nest scheme Wales.

Domestic Renewable Heat Incentive (closed)

The domestic Renewable Heat Incentive (RHI) scheme closed for the new applicants on 31st March 2022 and has been replaced by the Boiler Upgrade scheme 2022.

Boiler Upgrade Scheme (BUS)

The boiler upgrade scheme offers up to £5000 off the price of heat pumps.

The applicants of the scheme will receive a voucher that must be redeemed within three months. This means the heat pump must be installed within three months.

The government’s boiler upgrade scheme is part of a £3.9 billion package unveiled as a part of the Heat and Buildings Strategy to reduce carbon emissions in homes.

Eligibility for the boiler Upgrade scheme

The good thing about the scheme is that all homeowners, small landlords and private landlords are eligible for this scheme if they meet the criteria.

All applicants must have a current Energy Performance Certificate (EPC)- typically one granted within the last 10 years- with no outstanding loft cavity wall insulation recommendations.

Homeowners with outstanding recommendations for loft or cavity wall insulation may still apply if the installation of these forms of insulation was completed during the voucher validity period, as indicated by a newly generated EPC at the voucher redemption stage

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Warmer Homes Scotland

The Scottish initiative Warmer Homes provides potential heat pump funding among other energy-efficiency incentives to UK homes struggling to cover their energy bills and keep warm.

Assessors will survey your home to check if switching to renewable heating systems like air source heat pumps will reduce costs.

The financing cannot be obtained for the work that has already been completed while customers may have to contribute to some expensive modifications that are required.

Eligibility for Warmer Homes Scotland

You are eligible for heat pump funding if you meet all the following criteria:

  • You’re a homeowner or tenant of a private-sector landlord.
  • The home you want an air source heat pump for is your primary residence.
  • You’ve lived in the said home for at least 1 year (unless in receipt of a DS1500 certificate).
  • You live in a home with an energy rating of 67 or less and a floor area of no more than 230 square metres.
  • Your home meets the tolerable living standard set out in the Housing (Scotland) Act 2006 or in a home that does not meet the criterion, but which will not impact the effectiveness of energy-efficiency measures recommended.
  • You have not benefitted from this funding for the last 5 years.

Home Energy Scotland Loan

The Home Energy Scotland loan is part of various initiatives by the Scottish Government aimed at ending fuel poverty.

The scheme offers interest-free loans to pay the upfront costs of renewables including air source as well as ground source heat pumps.

You could get up to £17,500 interest-free when you install renewables through this scheme.

Additionally, you can benefit from a cashback of up to 75% depending on what type of renewable system you opt for.

Eligibility for home energy Scotland loan

To be eligible for this scheme, you must meet the following conditions:

  • Your loan can cover up to two renewable energy systems per home, up to a total of £17,500 (including up to £7,500 in cashback financing). If you’re installing a heat pump, you can also apply for an extra £500 for a heat meter.
  • You can also apply for financing to cover the cost of an energy storage system up to £6,000.
  • Cashback financing is also available for qualifying renewable heating technologies. Cashback grants cover up to 75% of the total cost of the improvement or the requested money, whichever is less and will not exceed the maximum amount indicated.
  • Only one whole-house heating system can be funded with your loan.
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Nest scheme Wales

All costs toward your air source heat pump could be covered by this scheme if you meet the eligibility criteria.

The grant is aimed at reducing the impact of climate change, ending fuel poverty, and supporting economic development in Wales.

Eligibility Criteria for Nest Scheme

  • Your home is energy inefficient and expensive to heat, whether you own it or rent it from a private landlord (not a council or housing association).
  • You or someone you live with receives a means-tested benefit OR
  • You or someone you live with has a chronic respiratory, circulatory, or mental health condition with a low income.

Can a heat pump save money?

By switching to air source heat pump you will certainly be adopting a greener heating appliance, but that doesn’t necessarily mean you will save money.

In fact, not only is the installation cost of a heat pump far higher than a gas boiler, but the price of electricity is much higher per kilowatt than gas in the UK.

Although the upfront cost is high, it is important to remember that you can take advantage of the various grants being offered by the UK government, such as the boiler upgrade scheme.

In fact, according to official government statistics, the average annual boiler requires 13,600 kWh of power and the average gas bill in 2020 was £557 (and £706 for electricity). 

At present, the cost of electricity is much higher than gas meaning it has ver high running costs, for example, electricity costs 3-16p per kWh compared to gas’ 3-4 per kWh.

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This means that an air source heat pump may not be cheaper to run than a gas boiler, especially in a property with poor thermal efficiency.

Heat pumps run off electricity and for every 1kWh of heat they provide, an estimated 25% comes from electricity and the remaining 75% comes from the air or ground, which makes them extremely efficient. 

However, since they don’t have a very high heat output, they require the property being heated to have a very high thermal efficiency, so are not appropriate in properties that are poorly insulated or very old, as these will lose heat at a very fast rate.

Does a heat pump always make sense?

It certainly makes sense to ask whether investing in air source heat pump makes sense, especially when they have an extremely high upfront installation cost.

There are many factors that come into account, but with the availability of a far cheaper option. i.e., gas boilers, very few people are inclined towards choosing a heat pumps for their home.

In reality, it’s most often only viable to install heat pumps in new homes that are well insulated and have the required space to install a brand new heat pump.

Additionally, there is no well-developed installation industry to date, which makes the task even more tiresome.

However, there is little doubt that it’s a greener alternative for meeting heating needs in British homes.

With that said, the main benefit of a heat pump, is its green credentials. An air source heat pump helps you to potentially remove 2.6 tonnes of greenhouse emissions annually if you replace your gas boiler with one.

It also helps the UK government to meet the net-zero emission goals by 2050 besides tackling fuel poverty, hence why there is a huge push to promote them and meet government targets to reach net zero by 2050.