The UK government is consulting on a new initiative that could allow families to pay for heat pumps in monthly instalments.
The expanding Boiler Upgrade Scheme can help finance the pumps, which are an eco-friendly alternative to gas boilers but can cost upwards of £10,000 more to install.
Potentially to be introduced as part of Labour’s Warm Homes Plan, the measures will allow households to pay for the equipment over several years or even lease a heat pump in a hire purchase agreement.
The consultation will also consider if Brits should be able to combine any purchase with a contract for an energy tariff, allowing providers to simplify costs into a single monthly payment.
Heat pump are electric appliances that are set to replace gas boilers in millions of homes. They work by transferring and intensifying heat from the outside air, ground or water into a building.
They are considered a greener way to heat your home, when compared to gas or oil, producing around three units of heat for every unit of electricity they use.
The UK government sees widespread heat pump installation installation as key to reducing emissions from homes, hoping to achieve Net Zero by 2050, and also save users money.
The plans, announced on 30 April, state that grants could be widened to cover a “air-to-air” heat pump, and heat batteries, which can store spare heat or electricity.
This equipment is currently not eligible for grants under Boiler Upgrade Scheme, which was introduced in 2022.
Here are some of the key grants available to help people save some money and make their homes more efficient.
The Energy Company Obligation (ECO) provides grants for energy efficiency measures such as cavity wall insulation and loft insulation for eligible households.
It is aimed at improving the least energy efficient homes and are provided by energy suppliers, rather than the government.
All large energy suppliers are under a Home Heating Cost Reduction Obligation (HHCRO) meaning suppliers must promote measures of certain households to reduce energy usage.
The grants are mainly aimed at low-income or fuel-poor households and those in vulnerable situations and can also help with upgrading a heating system, with heat pumps, for example.
You might be able to get help if you either claim certain benefits and live in private housing or live in social housing.
Find out more here.
This is a government-funded fuel poverty scheme delivered by local authorities aiming to improve the energy efficiency of homes.
The £500m scheme begins in 2025 and is set to increase low carbon heating installations in England, although other schemes may be available in Scotland, Wales or Northern Ireland.
The scheme allows for free energy saving improvements to your home if you’re on a low income, receiving certain benefits or living in certain postcodes.
If you are eligible, a home survey conducted by your local council, will be arranged to see how your home could be made more energy efficient.
Measures could include installing wall, loft and underfloor insulation, air source heat pumps, smart controls or solar panels.
Your local council will then organise and pay for any improvement work. If you have a landlord, they may need to pay for some of the improvements.
To be eligible, your home must be privately owned, have an Energy Performance Certificate (EPC) of D, E, F or G with some restrictions around household income.
Find out more here.
The Great British Insulation Scheme (GBIS) is an initiative designed to improve the energy efficiency of homes, particularly those of lower income households, and reduce energy bills.
The scheme provides funding for insulation measures like cavity wall insulation, loft insulation, and solid wall insulation.
The grant can be provided in a single insulation measure for free, but in some instances you may need to contribute towards the cost.
To qualify, you’ll need a home with an EPC rating of D or lower and be in council tax bands A-D in England and council tax bands A-E in Scotland and Wales.
GBIS is open to landlords and tenants, but if you rent you will need permission from your landlord or housing provider.
Find out more here.
The existing boiler upgrade scheme, available in England in Wales, offers up to £7,500 off the cost of a heat pump.
The scheme provides a grant to cover part of the cost of replacing fossil fuel heating systems, such as oil or gas, with a heat pump or biomass boiler.
Government figures say that heat pumps are becoming more popular, with a record 4,028 applications for grants under the boiler upgrade scheme received in March – up 88 percent on the same month last year.
According to the Microgeneration Certification Scheme (MCS) around 60,000 heat pumps were installed in 2024, with around 275,000 currently being used in the UK.
The scheme applies to one grant per property with £7,500 grants towards an air source or ground source heat pump or £5,000 towards a biomass boiler.
You must own the property you’re applying for, be replacing fossil fuel heating systems and the system must meet certain standards, such as minimum efficiency levels.
Find out more here.
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