Heat Pump Grant: Am I Eligible for £5,000 Upgrade?

Wall-mounted radiator with Selectra logo overlayed

Ministers have announced plans for £5,000 grants to homeowners for heat pumps in England and Wales. This is part of the wider strategy of reducing reliance on gas and offering a greener and more efficient alternative to traditional gas boilers. The Boiler Upgrade Scheme is budgeted at £450 million towards the up-front installation of a heat pump installation.


What Is A Heat Pump?

A heat pump extracts heat from the cold air or ground by using electricity. It is installed outside your property and can look similar to an air conditioner. 

Unlike traditional oil and gas boilers which use oil and gas to heat your home, heat pumps are far more efficient and better for the environment.

Traditional boilers emit carbon into the atmosphere, causing irreparable damage to the environment. Heat pumps use refrigeration cycles, like a kitchen fridge in reverse, to take the cold air and turn it into energy that can heat your home. This is a great way to reduce your carbon footprint.

How does a heat pump work?

Am I Eligible For The £5,000 Grant?

When the scheme begins to roll out next April, homeowners and landlords in England and Wales will be eligible for the heat pump grant to install a heat pump and move away from their traditional oil or gas boilers.

Is the heat pump grant available in Scotland and Northern Ireland? The scheme will not be available in Scotland. Scottish homeowners can apply for an interest-free loan from Home Energy Scotland or be reimbursed through the Renewable Heat Incentive (RHI). Northern Ireland uses a different energy system and there are no schemes currently available.

There is also a household income cap, which means only households under the £30,000 per year limit will be eligible for the grant.

The heat pump grant will only be available for around 90,000 households. Those that don’t qualify for the heat pump grant may be eligible for the Energy Company Obligation (ECO) grant instead.

You may be eligible for an extra £1,000 towards the installation if your property requires a heat pump that sources energy from the ground instead of from the air.

How Much Does a Heat Pump Installation Cost?

Installation is between £6,000 to £8,000 for an air-source heat pump. A ground-source heat pump is between £10,000 to £18,000. This includes all parts and labour. Of course, the total cost will vary depending on the size of your home and the type of heat pump you require.

With the heat pump grant, it’s expected that the total cost shouldn’t be too dissimilar to having a new, traditional type boiler installed.

Why Is The Government Offering Grants?

The heat pump grant is part of a £3.9 billion fund that is aiming to cut the UK’s carbon footprint. The government has plans to make all new heating systems low-carbon by 2035. The fund will also aim to reduce the carbon emissions of public buildings by 2024. This is part of a greater pledge for the UK to be net-zero by 2050.

As part of the initiative, the government has set aside £450 million to help households with traditional boilers go carbon-efficient by subsidising the cost of the installation by offering a heat pump grant worth £5,000-£6,000 to eligible households.

It is also a push for less reliance on natural gas and overseas supply. The government expects the heat pump initiative to create 240,000 jobs across the UK by 2035.

Is It Worth Having A Heat Pump Installed?

Whilst heat pumps are expensive at the start, the long-term savings are certainly beneficial. We estimate that for an average 100m2 property with typical gas central heating could save around £240 per year with an air-source heat pump, and £188 per year if you install a ground-source heat pump.

It is also important to point out that the heat generated from a heat pump is much cooler than a traditional boiler at around 35ºc - 40ºc. We recommend that you have a heat pump installed with underfloor heating for maximum efficiency.

Heat pumps have attracted some negative press because of the initial upfront cost and questionable ability to function efficiently during extreme weather. Some detractors have also mentioned that the funding needs to be increased, or installations fully subsidised, if the government wants more people to switch to a heat pump.

However, by having a heat pump installed you will also contribute to the reduction of your carbon footprint which will greatly benefit the environment.

To help you decide if you should apply for the heat pump grant, we’ve compiled a list of pros and cons for heat pumps.

Pros Cons
 Better air quality inside your home  The initial cost
 Extremely quiet when on  Less efficient during extreme weather periods
 Safer than gas  Can be larger than your traditional boiler
 Massive savings on your gas bill  May require planning permission
 Reduces your CO2 emissions  Your electricity bill will increase
 Low running cost
 Can also cool your home in the summer

How Can I Apply For The £5,000 Heat Pump Grant?

Eligible households can apply for the £5,000 heat pump grant via a heat pump installation engineer.

First, an engineer will provide an assessment of the type of heat pump you need, and the total cost for the installation. Should you decide to go ahead with the heat pump installation, your engineer will apply to Ofgem on your behalf and once approved, Ofgem will issue a voucher for the grant of £5,000, or £6,000 for ground source heat pumps.

The voucher should be valid for three months, which means you will need to organise the installation to be completed within this period. You may need to reapply if your voucher expires.

You will have 14 days from the date you sign the contract if you change your mind. They will also offer the consultations without obligation, which means you can see the total cost and decide if it is something you want to go ahead with.

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