Air Source Heat Pump Grants and Funding UK 2026

The £7,500 Boiler Upgrade Scheme grant means most UK homeowners now pay less than £5,000 out of pocket for a full air source heat pump installation. This guide covers every grant and funding option available across England, Scotland, and Wales so you can maximise your savings.

Government grants have transformed the economics of air source heat pumps. With up to £7,500 available in England and Wales — and potentially even more in Scotland — many households can now get a heat pump installed for a similar cost to a new boiler.

But the grants landscape is confusing. Different schemes exist in different parts of the UK, eligibility criteria vary, and the application process is not always straightforward. This guide covers every grant and funding option currently available, how to check if you qualify, and exactly how to apply.

The Boiler Upgrade Scheme (BUS) — England and Wales

The Boiler Upgrade Scheme is the main government grant for heat pumps in England and Wales. It is administered by Ofgem and provides a straightforward upfront discount.

How Much?

£7,500 towards the cost of an air source heat pump installation.

This is applied directly to your installer's invoice — you never pay the full price and claim back. Your out-of-pocket cost is the total installation cost minus £7,500.

Eligibility Criteria

• Existing property: The scheme is for existing homes, not new builds. Conversions of non-domestic buildings to residential use may qualify
• Valid EPC: Your property must have an Energy Performance Certificate with no outstanding loft or cavity wall insulation recommendations (unless you have a valid reason for not installing them)
• MCS-certified installer: The installation must be carried out by an installer certified under the Microgeneration Certification Scheme
• MCS-certified equipment: The heat pump itself must be on the MCS product certification register
• Property ownership: Owner-occupiers, landlords, and social housing providers can apply. Tenants cannot apply directly but can benefit if their landlord does
• One grant per property: You can only receive one BUS grant per property
• Not combined with ECO4: You cannot claim both BUS and ECO4 for the same installation

How to Apply

1. Get an EPC: If you do not already have one, arrange an EPC assessment (costs £60-£120). Check for any insulation recommendations that need addressing
2. Get quotes: Contact MCS-certified installers and get detailed quotes. Use our free quote service to find local installers
3. Accept a quote: Choose your preferred installer and agree to proceed
4. Installer applies: Your installer submits the BUS application to Ofgem on your behalf, including your EPC details and system design
5. Ofgem approves: Approval typically takes 2-4 weeks. The installer should not begin work until approval is confirmed
6. Installation and payment: Once installed, your invoice shows the grant deducted. You pay only the remaining balance

Timeline

Home Energy Scotland (HES) — Scotland

Scotland has its own scheme, which is actually more generous than the BUS for many households.

What Is Available?

• Interest-free loan: Up to £15,000 to cover heat pump installation costs, repaid over up to 12 years
• Cashback grant: Up to £7,500 for eligible households (income-dependent). This does not need to be repaid
• Rural uplift: Additional support may be available for rural and off-gas-grid properties

Eligibility

• Must be a homeowner or registered social landlord in Scotland
• The property must be your primary residence (for the grant element)
• The cashback grant amount depends on household income — lower-income households receive more
• The installer must be MCS-certified
• A Home Energy Scotland assessment is required before applying

How to Apply

1. Contact Home Energy Scotland (free phone: 0808 808 2282) for an initial assessment
2. A HES advisor will visit your home or conduct a phone assessment
3. Get quotes from MCS-certified installers
4. Apply for the loan and/or grant through the HES portal
5. Once approved, proceed with installation

Nest Scheme — Wales

The Nest scheme provides free home energy improvements, including heat pumps, to eligible households in Wales.

What Is Available?

Nest can provide a free heat pump installation for qualifying households, including the heat pump, cylinder, and any associated work. The scheme is means-tested and targeted at fuel-poor households.

Eligibility

• Must live in Wales
• Must own or privately rent the property (social housing tenants should contact their housing association)
• Must be in receipt of a qualifying means-tested benefit, OR
• The property must have an EPC rating of E, F, or G

How to Apply

1. Call Nest on 0808 808 2244 for an initial assessment
2. A Nest advisor will assess your eligibility and property
3. If eligible, Nest arranges the installation through their approved contractor network
4. The entire cost is covered — there is nothing for you to pay

ECO4 — Energy Company Obligation

ECO4 is a UK-wide scheme funded by energy suppliers. It targets fuel-poor and vulnerable households with free energy efficiency improvements, including heat pumps.

What Is Available?

ECO4 can cover the full cost of a heat pump installation, including any necessary insulation improvements, radiator upgrades, and associated work. There is no cost to the householder if eligible.

Eligibility

• Must be in receipt of certain means-tested benefits (Universal Credit, Pension Credit, Income Support, Income-based JSA, Income-related ESA, Child Tax Credit, Working Tax Credit, Housing Benefit)
• The property must have an EPC rating of D, E, F, or G
• The installation must improve the property's SAP rating by a minimum amount
• Owner-occupiers, private tenants (with landlord permission), and social housing tenants may be eligible

How to Apply

ECO4 does not have a central application process. Instead:

1. Contact your energy supplier to ask about their ECO4 obligations and eligibility
2. Or contact an ECO4-approved installer, who can check your eligibility and manage the process
3. A survey is carried out to assess the property and confirm eligibility
4. If approved, the work is scheduled and completed at no cost to you

Important: You cannot claim both ECO4 and the BUS grant for the same installation. If you are eligible for ECO4, it is usually more beneficial as it can cover the entire cost.

Local Authority Grants

Some local authorities offer additional grants, loans, or incentives for heat pump installations. These vary widely and change frequently. Check with your local council's housing or environmental services department for current schemes.

Examples of local authority support include:

• Council tax discounts for energy-efficient improvements
• Green home improvement loans at low interest rates
• Top-up grants for households just outside ECO4 eligibility
• Area-based insulation and heating upgrade programmes

Heat Pump Electricity Tariffs

While not a grant, switching to a heat pump-specific electricity tariff can save you hundreds of pounds per year. Several energy suppliers now offer tariffs designed for heat pump owners:

• Typically 17-20p/kWh compared to 24-28p standard rate
• Some offer time-of-use tariffs with cheaper overnight rates (ideal for reheating your hot water cylinder overnight)
• You usually need to prove you have a heat pump installed (MCS certificate) to qualify

At 18p/kWh on a heat pump tariff versus 25p on a standard tariff, a household using 4,000 kWh per year for heating saves £280 annually. For detailed cost comparisons, see our running costs guide.

Pairing your heat pump with solar panels can reduce your dependence on grid electricity even further, generating free power during daylight hours to offset your heating costs.

Can You Combine Grants?

The rules on combining funding are specific:

Common Grant Questions

Do I need an EPC for the BUS grant?

Yes. Your property must have a valid EPC. If it recommends loft or cavity wall insulation and you have not installed them, you will either need to get them done first or provide evidence of why they are not appropriate (e.g., the property has solid walls, not cavities).

Can landlords get the BUS grant?

Yes. Landlords can apply for the BUS grant for their rental properties. The grant is per property, not per person, so a landlord with multiple properties can apply for each one.

What happens if the grant runs out?

The BUS has an annual budget. If it is fully allocated before the end of the financial year, new applications may be paused until the next budget period. Applying early in the financial year (April) reduces this risk. The scheme is currently funded until at least March 2028.

Can I get a grant for an air-to-air heat pump?

No. The BUS grant and most other schemes only cover air-to-water heat pumps (and ground source heat pumps). Air-to-air systems are not eligible.

I am on benefits — which scheme should I apply for?

If you are on qualifying means-tested benefits, check ECO4 first. It can cover the entire cost of installation, which is more valuable than the £7,500 BUS grant. If ECO4 does not apply, you can still use the BUS grant.

How long does the BUS application take?

Ofgem typically processes applications within 2-4 weeks. Your installer handles the paperwork, so the admin burden on you is minimal. The main delay is usually in scheduling the installation itself.

Step-by-Step: Getting Your Grant

Here is the simplest path to securing funding for your heat pump:

1. Check your EPC: Find it at epcregister.com. If you do not have one, book an assessment
2. Check benefit eligibility: If you receive means-tested benefits, explore ECO4 first
3. Get installer quotes: Use our free quote service to find MCS-certified installers
4. Ask about grants: A good installer will handle the BUS application for you and advise on other available funding
5. Accept and proceed: Once you are happy with a quote and the grant is confirmed, schedule your installation

For a full understanding of what installation involves, read our installation guide. For detailed costs, see our cost breakdown. Or visit our grants page for a summary of current funding.