Green Homes Grant: What Happened and What Replaced It
If you have been searching for heat pump grants, you may have come across references to the Green Homes Grant. This was a government voucher scheme launched in September 2020 that offered homeowners in England up to £10,000 towards energy efficiency improvements, including heat pumps. It sounded excellent. Unfortunately, it was scrapped just six months later in March 2021.
This guide explains what the Green Homes Grant was, why it failed, and — most importantly — what has replaced it. The good news is that the current heat pump grant schemes are significantly better funded and more stable than the Green Homes Grant ever was.
What Was the Green Homes Grant?
The Green Homes Grant was announced by then-Chancellor Rishi Sunak in July 2020 as part of the government's economic recovery plan following the Covid-19 pandemic. It was intended to serve two purposes: stimulate the economy and improve home energy efficiency.
Key Features of the Green Homes Grant
- Voucher value: Up to £5,000 per household, or up to £10,000 for low-income households
- Coverage: The voucher covered up to two-thirds of the cost of eligible improvements
- Eligible measures: Insulation, heat pumps, solar thermal panels, double glazing, and other energy efficiency improvements
- Available in: England only
- Total budget: £2 billion (later reduced to £1.5 billion)
- Launched: September 2020
- Scrapped: March 2021
On paper, it looked like a transformative scheme. In practice, it was one of the most criticised government programmes in recent years.
Why Did the Green Homes Grant Fail?
The National Audit Office published a damning report on the Green Homes Grant in September 2021, highlighting multiple failures. Understanding what went wrong helps explain why the replacement schemes are designed differently.
Rushed Launch
The scheme was announced and launched within just a few months, with insufficient consultation with the industry. Installers and tradespeople were not ready to meet demand, and the application system was not properly tested before going live.
Bureaucratic Application Process
Homeowners reported enormous difficulty applying. The online portal was slow and confusing. Applications frequently stalled, were rejected on technicalities, or simply disappeared into a backlog. Many people spent weeks trying to navigate the system only to give up.
Installer Shortages
To participate, installers needed TrustMark certification and specific PAS qualifications. Many experienced tradespeople could not meet these requirements in time, creating a severe shortage of eligible installers. Homeowners who received vouchers often could not find an installer to do the work before the voucher expired.
Voucher Expiry Problems
Vouchers were initially valid for just three months. Given the installer shortage and the time needed to arrange surveys and installations, this was wholly inadequate. The deadline was extended, but by then many homeowners and installers had already given up on the scheme.
Poor Administration by ICL
The scheme was administered by a company called ICL, which struggled to process applications at the required volume. A backlog of tens of thousands of applications built up, with some homeowners waiting months for a response.
The Numbers Tell the Story
Of the intended £2 billion budget:
- Only around £314 million was actually spent on vouchers
- Approximately 47,500 measures were installed — far below the 600,000 target
- Around £50 million was spent on administration costs
- Thousands of homeowners had their applications cancelled when the scheme closed
The National Audit Office concluded that the scheme achieved "poor value for money" and criticised the government for its design and delivery.
What Replaced the Green Homes Grant?
After scrapping the Green Homes Grant, the government did not simply walk away from home energy efficiency. Instead, it introduced several replacement schemes, each designed to address specific aspects of decarbonisation. These schemes have been far more successful.
The Boiler Upgrade Scheme (BUS)
The Boiler Upgrade Scheme launched in April 2022 and is the direct successor to the Green Homes Grant for heat pump funding. It is simpler, better funded, and far more effective.
- Grant amount: £7,500 for an air source or ground source heat pump (increased from £5,000 in October 2023)
- Available in: England and Wales
- Extended to: March 2028
- How it works: Your MCS-certified installer applies on your behalf — no complex homeowner application
- Success rate: Much higher uptake than the Green Homes Grant, with over 50,000 installations completed
The BUS grant is a much more generous offer than the Green Homes Grant was for heat pumps. The Green Homes Grant covered up to two-thirds of costs to a maximum of £5,000 (or £10,000 for low-income homes). The BUS grant gives a flat £7,500 regardless of income, and the application process is handled entirely by the installer.
For full details, see our guide to heat pump grant amounts.
Home Upgrade Grant (HUG)
The Home Upgrade Grant replaced the Green Homes Grant's insulation and energy efficiency components for off-gas-grid homes. Delivered through local authorities, HUG provides comprehensive funding for insulation and heat pump installations in off-gas-grid properties occupied by low-income households.
ECO4 Scheme
The Energy Company Obligation (ECO4) scheme continues to fund energy efficiency improvements for low-income and vulnerable households. While ECO existed before the Green Homes Grant, it was expanded and strengthened after the Grant's demise. ECO4 can cover the full cost of a heat pump installation for eligible households.
Social Housing Decarbonisation Fund
The SHDF took over the social housing aspects of the Green Homes Grant. It provides large-scale funding to councils and housing associations to upgrade their properties, including heat pump installations in social housing.
Home Energy Scotland
Scotland was never part of the Green Homes Grant, but Home Energy Scotland has continued to offer one of the UK's most generous packages: up to £7,500 in grants plus £7,500 in interest-free loans for heat pump installations.
Lessons Learned: Why Current Schemes Work Better
The failure of the Green Homes Grant taught the government several important lessons that have shaped the current grant landscape:
- Simplicity: The BUS grant application is handled by the installer, not the homeowner. This removes the biggest barrier that plagued the Green Homes Grant
- Longer timeframes: The BUS grant runs until March 2028, giving homeowners and installers confidence to plan ahead. The Green Homes Grant's six-month lifespan was far too short
- Industry readiness: The MCS certification system was already established when the BUS launched, meaning there were enough qualified installers from day one
- Realistic targets: Current schemes have achievable targets based on actual installer capacity, rather than the wildly optimistic projections of the Green Homes Grant
- Multiple targeted schemes: Instead of one scheme trying to do everything, the government now runs separate, focused programmes for different needs
Are There Still People Affected by the Green Homes Grant Closure?
When the Green Homes Grant closed, thousands of homeowners had pending applications that were cancelled. If you were one of them, you have no recourse to recover funds from the closed scheme. However, you are almost certainly better off under the current schemes:
- The BUS grant of £7,500 is more generous than the typical Green Homes Grant voucher was
- The application process is far simpler
- There are more qualified installers available
- The scheme has a much longer timeframe, so there is no rush
If you started a heat pump project during the Green Homes Grant era and put it on hold, now is an excellent time to revisit it.
What About Future Schemes?
The government has signalled long-term commitment to heat pump deployment. The Clean Heat Market Mechanism (CHMM), introduced in 2025, sets targets for boiler manufacturers to sell heat pumps alongside boilers. This is expected to drive down heat pump prices over time as manufacturers increase production.
There is also ongoing discussion about expanding grant support, potentially including additional funding mechanisms such as low-interest loans and pay-as-you-save schemes. The direction of travel is clear: more support, not less.
Frequently Asked Questions
Can I still apply for the Green Homes Grant?
No. The Green Homes Grant closed in March 2021 and is no longer accepting applications. It has been replaced by several better schemes, including the Boiler Upgrade Scheme.
What replaced the Green Homes Grant for heat pumps?
The Boiler Upgrade Scheme (BUS) is the main replacement, offering £7,500 towards a heat pump in England and Wales. Additional support is available through the Home Upgrade Grant, ECO4, and local authority schemes.
Is the BUS grant better than the Green Homes Grant was?
Yes, significantly. The BUS grant offers more money (£7,500 versus up to £5,000), has a simpler application process (your installer handles it), and runs for much longer (until March 2028).
Why did the Green Homes Grant fail?
It was rushed, had a complex application process, faced severe installer shortages, and was poorly administered. The National Audit Office called it "poor value for money."
What if I had a Green Homes Grant application pending when it closed?
All pending applications were cancelled. You cannot claim retrospectively. However, the BUS grant is more generous, and you can apply for it through any MCS-certified installer.
Are there any grants for insulation now?
Yes. The Home Upgrade Grant (for off-gas-grid homes), ECO4 (for low-income households), and various local authority schemes all cover insulation. The BUS grant requires a valid EPC with no outstanding loft or cavity wall insulation recommendations.
Ready to take advantage of the current, better-funded schemes? Read our complete guide to heat pump grants in 2026, check whether a heat pump is worth it for your home, or get free quotes from MCS-certified installers in your area.