Ground Source Heat Pump Grants UK 2026

The Boiler Upgrade Scheme gives £7,500 towards a ground source heat pump in England and Wales, or £9,000 when it replaces oil or LPG heating in a home without mains gas (until 31 March 2027). Combined with Scotland's separate funding and 0% VAT (until 31 March 2027), homeowners can reduce the upfront cost of a ground source heat pump by £10,000 or more. Here is every funding option available and exactly how to claim.

Ground source heat pumps are expensive to install — but the Boiler Upgrade Scheme grant of £7,500 (or £9,000 when replacing oil or LPG in a home without mains gas) makes a real difference. This guide covers every grant and funding option available in 2026, including who qualifies, how to apply, and how to make sure you do not miss out.

The Boiler Upgrade Scheme (BUS)

The Boiler Upgrade Scheme is the main government grant for heat pump installations in England and Wales. It has been running since 2022, and government funding is confirmed to 2029/30. GOV.UK does not publish a scheme end date, and grant levels can change, so check GOV.UK before you apply.

Eligibility Requirements

To qualify for the BUS grant towards a ground source heat pump, you need:

• Existing property — previously occupied homes only. New builds are excluded
• Replacing fossil fuel or direct electric heating — your installer confirms the detailed eligibility rules (GOV.UK does not list an EPC as an eligibility condition, and the old loft insulation condition was removed in May 2024)
• MCS-certified installer — the installation must be carried out by an MCS-certified company
• Property in England or Wales — Scotland has its own scheme

How to Apply

You do not apply yourself. Your MCS-certified installer applies for the grant voucher through the Ofgem portal on your behalf. The grant is deducted directly from your bill, so you never handle the grant money yourself.

Scotland: Home Energy Scotland

Scotland operates its own funding scheme through Home Energy Scotland, which can be more generous than the BUS for eligible homeowners.

• Grant of up to £7,500 for a heat pump, plus a £1,500 uplift for eligible rural and island homes (up to £9,000)
• Optional interest-free loan of up to £7,500 on top of the grant
• Check the details with Home Energy Scotland, as eligibility rules apply

Contact Home Energy Scotland on 0808 808 2282 for a free, impartial assessment.

ECO4 Scheme

The Energy Company Obligation (ECO4) scheme requires major energy suppliers to fund energy efficiency improvements in low-income and vulnerable households. Ground source heat pumps can be funded under ECO4 for households receiving certain means-tested benefits with properties rated EPC D or below.

Local Authority Grants

Some local councils offer additional grants or loans for renewable heating installations. These vary widely and change regularly — check with your local authority directly.

Ground Source vs Air Source Grant Amounts

The standard BUS grant is the same £7,500 for ground source and air-to-water heat pumps. Both rise to £9,000 when the heat pump replaces oil or LPG heating in a home without a mains gas connection (21 July 2026 to 31 March 2027). Because ground source systems cost more to install, the grant covers a smaller share of the total.

Combining Grants with Other Savings

• 0% VAT — heat pump installations are zero-rated for VAT until 31 March 2027 (HMRC VAT Notice 708/6)
• Heat pump tariffs — some suppliers offer heat pump or time-of-use tariffs; availability changes often, so check the supplier's current rates (last reviewed October 2026)
• Smart export guarantee — if you have solar panels, excess electricity can offset your heat pump running costs
• Green finance — specialist lenders offer competitive rates for renewable heating

What If I Am Not Eligible for the BUS Grant?

The most common reasons for ineligibility are a new build property or using an installer who is not MCS-certified; the second is easily fixed. Even without the BUS grant, ground source heat pumps can still make financial sense for properties currently on oil or LPG. Use our heat pump calculator to model the numbers.

Frequently Asked Questions

How long does the BUS grant take to process?

Once your installer submits the application, a voucher is typically issued within 2-4 weeks. The voucher is valid for 3 months, with a possible extension to 6 months — important for ground source installations that may need longer lead times.

Can I get the BUS grant and ECO4?

No — you cannot receive both for the same installation. Your installer can advise on which route offers better value.

Is the BUS grant available for second homes?

Yes, as long as the property meets the eligibility criteria. The grant is per property, not per person.

Can landlords apply for the BUS grant?

Yes. Landlords of domestic rental properties can apply provided the work is done by an MCS-certified installer, who applies for the grant and confirms eligibility.

Will the BUS grant amount increase?

GOV.UK does not publish a scheme end date. The additional £1,500 for oil and LPG off-gas-grid properties is stated as running until March 2027. There is no indication of an increase.

Does the grant cover the full cost?

The £7,500 covers a portion — around 40% of a horizontal system or 21% of a borehole system. The remaining cost is yours, though finance options are available.

For a detailed look at what ground source heat pumps cost before and after grants, read our full cost breakdown.