Heat Pump Grants and Incentives in the UK

Air source heat pumps qualify for grant funding and incentive schemes when installed in specific types of properties and subject to eligibility criteria being fulfilled. With energy bills remaining high for households and Government striving to achieve targets for lowering carbon emissions, a range of funding schemes are available in England, Scotland and Wales to help homes move away from traditional fossil fuel heating systems and towards more sustainable, low carbon solutions, such as heat pumps.

Each scheme has its own set of requirements and certain properties are not eligible – for example, new build homes are not eligible for grant funding but homes retrofitting a heat pump and some self-build homes may be eligible for Government incentives and initiatives.

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In this blog, we will explain:

• The current grant landscape for heat pumps
• The Boiler Upgrade Scheme in England and Wales
• Heat pump funding in Scotland
• Local authority and energy company incentives
• Tax and Building Regulation incentives
• Who is eligible for funding
• Other financing options and future incentives

Understanding the grant landscape for heat pumps

Funding for heat pumps is not a new idea but over the years, the schemes delivering such financial support have changed. In January 2026, the Government published its Warm Homes Plan which sets aside £15bn of funding across a range of schemes including increased funding allocation to the Boiler Upgrade Scheme as well as making £2bn available in low-interest loans to support universal adoption of heat pumps, solar PV panels and batteries. The schemes supporting the installation of heat pumps are designed to make this low carbon heating system more accessible and affordable for homes, increasing uptake throughout the UK. 

The Boiler Upgrade Scheme (BUS) – 2026 Update

The Boiler Upgrade Scheme (BUS) offers £7,500 grants for the installation of air-to-water heat pumps and ground source heat pumps. The BUS is available to eligible households (with a heating capacity of up to 45kWth) in England and Wales who replace their existing fossil fuel boiler with an air source heat pump (or ground source option, with lower grants available for air-to-air heat pumps). Eligibility criteria apply which exempt new build properties from BUS funding, however self-build or custom build homeowners can apply. Furthermore, the heat pump installer must be MCS certified and the heat pump unit itself must also be MCS approved, which all Grant air source heat pumps are. 

Since BUS first launched in 2022, over 80,000 BUS grant vouchers have been issued totaling £563,012,000 (correct 10^th February 2026, Ofgem). Please read one of our other blogs to learn more about the Boiler Upgrade Scheme.

Home Energy Scotland grants and loans

The Home Energy Scotland Grant and Loan Scheme (HES) offers grants of up to £7,500 as well as interest free loans of up to £7,500 towards the installation of a new air source heat pump. HES funding is available to eligible households in Scotland and funding is subject to availability – it is important to note that HES is run by the Scottish Government. Through this scheme, eligible homeowners can claim a grant, a loan or a combination of both to access financial support for a new heat pump installation and other energy efficiency improvement measures for their home. As with BUS, heat pump installations claiming HES funding must be completed by a MCS certified heat pump installer and the heat pump installed must be MCS approved.

Discover more about the Home Energy Scotland Grant and Loan Scheme here.

Local authority and energy company incentives

Government funding is available for local authorities and social housing to support the installation of heat pumps. As part of the Government’s existing policy, the Warm Homes: Local Grant is a scheme available for local authorities in England and Wales, and the Warm Homes: Social Housing Fund Wave 3 is available for social housing in England. Through the Warm Homes: Local Grant, funding is allocated to local authorities to deliver energy efficiency upgrades into low income households, including the installation of air source heat pumps. Meanwhile, the Warm Homes: Social Housing Fund comprises of over a billon pounds worth of funding designed to upgrade social housing properties with improved insulation measures and low carbon heating systems.

The Government’s latest Warm Homes Plan, published in January 2026, confirms that financial support to help low income households come out of fuel poverty will remain, with the Warm Homes: Local Grant and Warm Homes: Social Housing Fund schemes continuing to be available to eligible authorities.

It is worth noting that the Energy Company Obligation (ECO4) Scheme, which distributed Government funding through energy providers to support heat pump installations in homes, is ending on 31^st March 2026.

Tax and Building Regulation incentives 

HM Treasury have removed VAT on certain types of energy-saving materials. This means that VAT relief is available for air source heat pumps until 31^st March 2027, reducing the purchase price for homeowners. A zero-rate of VAT can be applied on certain energy saving materials provided they are being installed in a domestic property located in Great Britain.

Meanwhile, in 2025, changes were made to permitted development rights in England, reducing the restrictions in place for air source heat pump installations. Changes to boundary restrictions, heat pump sizes and noise limits were introduced to local planning rules in England, resulting in most air source heat pump installations not requiring planning permission. Learn more about heat pumps and planning permission here.

Who qualifies for heat pump funding?

Funding schemes for heat pumps have criteria which must be met in order to claim and receive financial support. Those seeking to apply for funding should check the eligibility criteria for the scheme they are applying for to ensure they meet the individual scheme’s requirements. In summary, funding for a heat pump is available for:

• Homeowners in England and Wales can apply for a £7,500 grant through the Boiler Upgrade Scheme (if they have a property currently heated by a gas or oil boiler and they replace this with an air source heat pump)
• Homeowners in Scotland can apply for grant, a loan or a combination of both through the Home Energy Scotland Funding Scheme (to install a heat pump and other energy efficiency measures)
• Self-build or custom home homeowners in England and Wales can apply for the Boiler Upgrade Scheme
• New build developments are not currently eligible for the Government funding schemes mentioned in this blog.

Heat pump case studies

Air source heat pumps provide homeowners with an efficient, reliable and sustainable solution for heating their homes and hot water. With various funding schemes available to financially support households with heat pump installation costs, is the time right for you to make the move to low carbon heating? Read through some of our case studies below to learn more about Grant heat pumps in action and to read customer feedback from those living with an Aerona heat pump:

•         Complete home heating system supplied by Grant UK for self-build home
•         Aerona 290 heat pump modernises home’s heating
•         Living with a Grant R290 heat pump.