Heat pump grants: the £7,500 discount explained
A heat pump is the most heavily subsidised home upgrade in Britain right now: £7,500 off, no means test, and the scheme is funded to 2030. It’s also surrounded by more myth and salesmanship than any other product we cover. Here’s how the grant works and — because this is the bit most articles dodge — what it honestly does to your bills.
The Boiler Upgrade Scheme in plain English
The Boiler Upgrade Scheme (BUS) covers England and Wales and gives:
- £7,500 off an air source heat pump (the common kind — a unit outside that heats radiators and water)
- £7,500 off a ground or water source heat pump
- £2,500 off an air-to-air heat pump — new since the Warm Homes Plan; these heat rooms directly (and cool them in summer) but don’t do hot water
- £5,000 off a biomass boiler in rural, off-gas-grid homes
You qualify if you own the property (including landlords and, in most cases, second homes) and you’re replacing a fossil-fuel or electric heating system. Most new-builds don’t qualify; self-builds do. One grant per property.
Two 2026 rule changes worth knowing, because older articles get them wrong: since April 2026 you no longer need an EPC to apply, and the old requirement to have loft or cavity insulation recommendations dealt with first was scrapped back in 2024. The scheme runs to 2029/30 with confirmed funding.
How you actually get the money: you don’t. Your installer must be MCS-certified, and they apply to Ofgem and knock the £7,500 off your quote. If a company asks you to pay full price and “claim it back”, walk away. And a diary note: once you apply, the installation needs to happen within 120 days.
What it costs after the grant
The Energy Saving Trust puts a typical air source heat pump installation at around £11,000 before the grant — so roughly £3,500 after it, though complex homes cost more and simple ones less. That’s in new-gas-boiler territory (a boiler swap is typically £2,000–£4,000). The government puts a typical air-to-air installation for a flat or small house at about £4,500 — around £2,000 after the £2,500 grant.
Get three quotes. Prices for identical kit vary widely between installers, and the grant is the same whoever fits it.
The honest bit: running costs
Here’s the arithmetic that matters. Under the current price cap (July–September 2026), electricity costs 26.11p per kWh and gas 7.33p — electricity is about 3.6 times the price of gas per unit. A well-installed heat pump turns one unit of electricity into roughly three or more units of heat; a modern gas boiler turns one unit of gas into a bit less than one unit of heat.
Three-and-a-bit times the efficiency against three-and-a-half times the price means: on a standard tariff, a heat pump costs about the same to run as a new gas boiler — the Energy Saving Trust’s own words are that it “may cost slightly more”. The running-cost savings come from heat-pump tariffs: time-of-use electricity deals designed for heat pump owners, which the EST says reduce running costs significantly and can tip the comparison clearly in the heat pump’s favour. So the tariff isn’t an afterthought — it’s half the economics. Ask every installer which tariff their estimate assumes.
What a heat pump definitely does: cuts your home’s carbon substantially, removes the gas standing charge if you disconnect gas entirely (about £106 a year at current rates — check nothing else in the house uses gas first), and replaces a boiler that would have needed replacing anyway at £2,000+.
Will it work in your house?
Mostly yes — heat pumps run happily in cold climates and ordinary UK homes. The honest requirements: somewhere outside for the unit (planning rules were relaxed in 2025, allowing bigger units and up to two on detached homes), possibly some larger radiators, and a home that isn’t a sieve — insulation isn’t legally required any more, but a draughty home makes any heating expensive. Our insulation grants guide covers getting that fixed free if you qualify.
A proper installer will do a room-by-room heat-loss survey before quoting. Treat anyone who quotes without one the way you’d treat a surveyor who values a house from the car.
Scotland (and Northern Ireland)
Scotland’s scheme is arguably better: Home Energy Scotland offers a grant of up to £7,500 (up to £9,000 in rural and island areas) plus an optional interest-free loan of the same again, alongside separate grants for insulation. Owner-occupied main homes; no benefits test. Northern Ireland has no direct equivalent grant at the time of writing — check nidirect for current support.
The decision in one paragraph
If your boiler is on its last legs, the grant changes the question from “boiler or heat pump?” to “£3,000 boiler or £3,500 heat pump with lower carbon and possibly lower bills on the right tariff?” — genuinely close. If your boiler is young and healthy, there’s no financial case for ripping it out early; note the scheme runs to 2030 and revisit when it matters. Either way, nothing here is a recommendation of a specific product or supplier — get your three quotes, ask about tariffs, and make the call with your own numbers.
Sources
- gov.uk — Apply for the Boiler Upgrade Scheme
- gov.uk — Discounts for families to keep warm in winter and cool in summer (air-to-air announcement)
- gov.uk — Warm Homes Plan (policy paper)
- Energy Saving Trust — Air source heat pumps
- Ofgem — Changes to the energy price cap, 1 July to 30 September 2026
- Home Energy Scotland — Grant and loan
Just so you know: this guide is information and journalism, not financial advice, and we don't recommend specific financial products. Your circumstances are your own — if you need personal advice, speak to a suitably qualified adviser. Information was correct at the "last updated" date above but things change; always check the linked primary sources.