Maximise Savings with Heat Pump Grants: Comprehensive Guide for UK Homeowners

Since the UK government set a goal to fully decarbonize homes by 2050, various grants have been introduced to encourage the adoption of eco-friendly heating systems like heat pumps. These grants make upgrading to heat pumps more accessible for homeowners. Heat pumps boast an impressive energy efficiency of around 300-400%, far surpassing modern boilers, which achieve efficiencies of only 92-95%.

For environmentally-conscious households, heat pumps offer a great way to reduce energy bills and lower carbon footprints. They use renewable energy from the air or ground to provide both heating and cooling by absorbing heat from the outside and transferring it inside, and vice versa, using electricity.

Switching from an old G-rated gas boiler to a heat pump can save you approximately £340 annually on your energy bills. Combined with potential grant funding, these long-term savings make heat pumps a smart investment for the future.

In this article, we'll explore the various government grants available in the UK to help you make an informed decision about upgrading to a heat pump.

Heat Pump Government Grants in the UK

The cost of installing an air-source heat pump can range from £2,400 to £14,050, while ground-source heat pumps, which require excavation and piping, can cost between £16,200 and £49,000. Despite the higher upfront costs, these systems can lead to substantial long-term savings on your energy bills and significantly reduce your carbon footprint. According to the Energy Saving Trust, switching from an old G-rated gas boiler to an air-source heat pump in a semi-detached home can save around 2,900 kg of CO2 emissions annually.

However, switching to an environmentally friendly heat pump doesn’t have to be a financial burden. You could receive full or substantial funding for your heat pump through these valuable grants. Dive in to discover all about these government schemes and upgrade to a heat pump at no cost.

Boiler Upgrade Scheme

The Boiler Upgrade Scheme (BUS) has been running since April 2022 and will end in March 2028. It aims to promote the adoption of heat pumps and biomass boilers. Available to homeowners in England and Wales, this government scheme offers grant fundings of £7,500 for air-source and ground-source heat pumps and £5,000 for biomass boilers.

Since the heat pump grants have been increased from £6,000 to £7,500, if you applied for a heat pump grant before October 23, 2023, and your installer hasn't installed the new heat pump yet, the government recommends talking to your installer about cancelling your existing grant application. This way, you can reapply and take advantage of the higher grant amount now available.

Who Qualifies for a Heat Pump Grant under BUS?

The Boiler Upgrade Scheme (BUS) aims to support homeowners in England and Wales in transitioning from fossil fuel heating systems to more efficient and environmentally friendly heat pumps. Below are the detailed eligibility criteria for the scheme:

• Property Ownership:
  • The applicant must own the property. This includes owner-occupied homes, second homes, and privately rented properties.
  • Social housing tenants and new builds (unless self-built) are generally not eligible.
• Existing Heating System:
  • The current heating system must be a fossil fuel system such as gas, oil, or coal boilers.
  • The scheme does not cover the replacement of existing low-carbon heating systems.
• Location:
  • The property must be located in England or Wales.
• Energy Performance Certificate (EPC):
  • A valid EPC is required to apply, but as of March 2024, there is no longer a mandatory requirement to have no outstanding recommendations for loft or cavity wall insulation.
• Heat Pump System Standards:
  • The installed heat pump system must meet certain efficiency standards and have a maximum capacity of 45kWth for individual systems and 300kWth for shared ground loops.
• Certified Installers:
  • The installation must be carried out by an MCS (Microgeneration Certification Scheme) certified installer. The MCS quality assurance scheme ensures that installers are competent, and the products they use meet the correct standards.

Energy Company Obligation (ECO4)

The ECO4 is the fourth phase of the ECO scheme and is scheduled to run from 2022 to 2026. This government scheme promoted the use of various energy-efficient measures, including heat pumps. They conduct a full assessment of your home to determine all the upgrades you are eligible for. They support low-income and vulnerable households by providing substantial and full funding for heat pumps and other eco-friendly upgrades.

ECO4 has a “fabric-first” strategy, meaning before you can claim your heat pump grant, your home needs to be properly insulated first. This ensures your new heating system works as efficiently as possible. For instance, a home with poor wall insulation loses around 35-45% of heat through its walls. This not only raises your energy bills but it also causes your heat pump to break down sooner, as it has to work harder to produce enough heat for your home.

However, you don’t have to worry about insulation costs. ECO4 has no limits on the funding’s it offers, so you can also insulate your home for free before claiming your heat pump grant under the ECO4. For more information on insulation grants, check out our article on 2024 Home Insulation Grants.

Who Qualifies for a Heat Pump Grant under BUS?

The ECO4 scheme focuses on improving the energy efficiency of low-income and vulnerable households in the UK. Here’s a detailed overview of the eligibility criteria for heat pumps under this scheme:

• Income Requirements:
  • The household must meet specific income requirements. Typically, this includes being in receipt of certain benefits such as Universal Credit, Income Support, Jobseeker’s Allowance, Employment and Support Allowance, Pension Credit, or other qualifying benefits.
• Home Ownership:
  • The property can be owner-occupied or privately rented. Social housing tenants are generally not eligible unless it meets specific criteria set by the scheme.
  • The landlord's consent is required for rented properties.
• Energy Efficiency Status:
  • The property must be deemed energy inefficient, usually with an Energy Performance Certificate (EPC) rating of D, E, F, or G. Homes with higher energy efficiency ratings are less likely to qualify for the scheme.
• Existing Heating System:
  • The current heating system should ideally be a fossil fuel-based system (e.g., gas, oil, or coal boilers). The scheme aims to replace these with more efficient, low-carbon heating solutions like heat pumps.
• Certified Installers:
  • The installation must be carried out by an accredited installer who meets the standards set by the Microgeneration Certification Scheme (MCS). This ensures the quality and efficiency of the installation.
• Technical Standards:
  • The installed heat pump system must meet certain technical and efficiency standards to qualify for the grant. Your installer will advise you on these requirements.

0% VAT

The Zero VAT aims to promote the use of energy-efficiency technologies such as heat pumps. It reduces the costs of installing these measures by eliminating their Value Added Tax (VAT) on their installation. The standard VAT in the UK is 20% so by reducing it to 0%, you can save up to £750 on installation costs.

Heat Pump Government Grants in Scotland

Warmer Homes Scotland

The Warmer Homes Scotland scheme is designed to help those who are struggling to keep warm and pay their energy bills by offering grant funding of up to £10,000 or more for energy-efficiency upgrades, including heat pump grants. Here are the general eligibility criteria for the Warmer Homes Scotland:

Residency Requirements

To be eligible:

• Homeowner or Private Tenant: You must own your home or be a tenant in private rental housing.
• Primary Residence: The property must be where you live most of the time. You need to have resided there for at least six months unless you are terminally ill, in which case different rules apply.

Property Conditions

Your home must meet the following criteria:

• Council Tax Bands: It should fall within council tax bands A to F.
• Energy Rating: The home should have a poor energy rating, which will be assessed by Warmworks, the delivery partner of the program.
• Living Standards: The property must comply with the tolerable living standards set out in the Housing (Scotland) Act 2006. This includes basic criteria like having a structurally sound building, safe water supply, and adequate natural light.

Household Criteria

To further qualify, at least one member of your household must meet one of the following conditions:

• Age: Be over 75 years old and lack central heating.
• Health: Be terminally ill with the appropriate medical certification.
• Benefits: Be receiving certain benefits which indicate a need for energy assistance.

Home Energy Scotland Scheme

The Home Energy Scotland scheme helps homeowners in Scotland upgrade, improve their home’s energy efficiency, reduce carbon footprints, and lower energy bills through various funding options. It offers grant funding of up to £15,000, which includes up to £7,500 for energy-efficiency improvements, such as insulation and another £7,500 for clean heating systems, like heat pumps. If you live in a rural area, you could get an extra £1,500 for each of these upgrades, making it a total of £18,000 grant funding. Here are the general eligibility criteria to get a free heat pump grant under this scheme:

Homeownership

• Who Can Apply: You need to own your home to be eligible for the Home Energy Scotland scheme. This means if you live in a rented property or you’re a landlord, this particular funding isn’t available for you.
• Documentation Needed: Proof of homeownership might include your mortgage statement, property deeds, or buildings insurance policy.

Primary Residence

• Main Home: The property must be your main residence. This means it’s the home where you live most of the time.
• Residency Duration: You should have lived in your home for at least six months before applying, unless you are terminally ill.

Energy Performance:

• Energy Performance Certificate (EPC): Your home should have an EPC rating that shows it needs improvements in energy efficiency. This certificate evaluates the energy efficiency of your home and is a key part of your application. If you don't have an EPC, Home Energy Scotland can help you get one.

Government Grant for Heat Pumps in Wales

Nest Scheme, Wales

The Nest Scheme is a comprehensive government grant that offers a variety of free home energy efficiency improvements, including insulation, heat pumps, and renewables such as solar panels. It covers the full cost of heat pumps to make sure everyone can benefit from these eco-friendly heating systems, helping them reduce energy costs and lower their carbon footprint. Here’s the general eligibility criteria for getting a heat pump installed through this scheme:

Homeownership or Tenancy

• You must either own your home or be a private tenant. Unfortunately, if you live in local authority or housing association properties, this scheme isn’t available for you. If you are a private tenant, your landlord’s consent will be required for any installations.

Income and Benefits

• Means-Tested Benefits: If you or someone in your household receives means-tested benefits such as Universal Credit, Income Support, Pension Credit, or Housing Benefit, you might be eligible.
• Low-Income Households: Households with an income below 60% of the median UK income also qualify. This means, for example, a single adult with no children should have a total annual income below approximately £12,987 after housing costs.

Energy Performance Certificate (EPC) Rating

• Your home must have an EPC rating of E (54) or lower. If you or someone in your household has a chronic health condition, the required EPC rating is slightly more lenient at D (68) or lower. Health conditions that qualify include respiratory diseases, cardiovascular diseases, and certain mental health conditions.

Health Conditions:

• If you or a member of your household suffers from certain chronic health conditions, you might qualify even if your home’s EPC rating is slightly better. Accepted health conditions include respiratory issues, cardiovascular problems, and mental health conditions such as depression or anxiety.

Unlock Free Heat Pump Grants with ByEco!

At ByEco, we are committed to helping you transition to eco-friendly heating solutions at no cost. To check your eligibility and apply for heat pump grants, simply fill out our form. We will review your information and contact you to schedule a comprehensive home assessment. This assessment will help us determine the specific grants you qualify for. Our team will then guide you through the entire application process and connect you with top-rated MCS-certified installers in your area. We aim to make your switch to green heating solutions as smooth and hassle-free as possible, ensuring you benefit from the available government grants and enjoy long-term savings.

Ready to make the switch? Fill out our form today to get started!

Heat Pump Government Grants in the UK Boiler Upgrade Scheme Energy Company Obligation (ECO4) 0% VAT Heat Pump Government Grants in Scotland Warmer Homes Scotland Home Energy Scotland Scheme Government Grant for Heat Pumps in Wales Nest Scheme, Wales Unlock Free Heat Pump Grants with ByEco!