Renewable

What is the Home Energy Scotland Grant and Loan Scheme?

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What is the Home Energy Scotland Grant and Loan Scheme?

The Home Energy Scotland (HES) Grant and Loan Scheme provides eligible homeowners with a grant, an interest free loan or combination of both that can be used towards the costs of installing renewable technology in their homes, including air source heat pumps. In this blog, we explain more about what the HES Scheme is, the funding available and its eligibility requirements.

The funding available through the Home Energy Scotland (HES) Scheme is provided by the Scottish Government and aims to help households install renewable heating systems and energy efficiency measures into their homes. Grants and loans are available and eligible homeowners can apply for one form of funding or a combination of both to cover the installation costs of a number of sustainable measures in their homes. The funding aims to support the Scottish Government’s target of generating 50% of Scotland’s overall energy consumption from renewable sources by 2030.

HES funding, which is different to the Warmer Homes Scotland programme, gives eligible applicants the opportunity to access a grant of up to £7,500 for a new heat pump installation with an additional £7,500 also available as an interest free loan. In this blog, we will explain more about Home Energy Scotland grants and loans, the technologies eligible as well the criteria for applicants.

Why has this scheme been introduced?

The Scottish Government is aiming to decarbonise its energy system almost completely by 2050 by implementing measures which will help reduce emissions and help homes improve their energy efficiency as well as lowering their reliance on fossil fuels. The HES Scheme, which was first launched in December 2022, provides financial support for homeowners to help them make energy saving improvements to their homes. With thousands of homes currently reliant on traditional fossil fuels which produce carbon emissions, the transition to renewable energy systems, such as heat pumps, will make a significant difference to the environment. Hence why government schemes, such as HES funding, have been developed to make it easier for consumers to install low carbon systems into their homes.

Through the Scheme, separate HES grants and HES loans are each available for eligible improvement measures, with applicants able to choose one funding type or a combination of both. The funding available varies depending on the technology or measure with multiple improvements eligible. HES funding, which is available in Scotland only, is different to the Boiler Upgrade Scheme which provides homeowners in England and Wales with a grant of £7,500 for new heat pump installations when they make the swap from a fossil fuel boiler.

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What technologies are available under the HES Scheme?

A number of technologies are supported by either a HES loan or HES Grant or both. Heat pumps and wood fueled boilers are eligible for both a loan and a grant whereas solar thermal, wind turbines and micro hydro are eligible for a loan only. As mentioned earlier, grant funding of up to £7,500 is available for a heat pump and additional support is available for rural and island homes who are eligible for a rural uplift of a £1,500 grant, providing a £9,000 grant for such qualifying households. In addition, grant and loan funding is also available for energy efficiency measures, such as insulation.

Hybrid heat pumps can also eligible for funding, including the HES grant and loan, but quotations and invoices must be clearly itemised so that the costs between renewable and non-renewables components are separated. Funding is only available to help towards the renewable element of the system and hybrid applications will be assessed on a case-by-case basis.

To view a full summary of the funding available per technology, please visit the Home Energy Scotland website.

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Home Energy Scotland Grant Eligibility

The funding available through the HES scheme is subject to availability, operating on a first come, first serve basis and full eligibility criteria needs to be met. Homeowners therefore need to be aware of these requirements before applying for a HES loan and/or HES grant.

MCS Certified Installers

The HES Scheme stipulates that all heat pumps installed need to be certified through the Microgeneration Certification Scheme (MCS). Products which are MCS certified have been recognised for meeting industry standards, giving consumers confidence in their quality and performance. Grant air source heat pumps are MCS approved so are eligible for HES funding.

In addition, the installing engineer must also be MCS registered. Grant UK have a network of G1 heat pump installers and you can use our Find an Installer search to enter your postcode and find a local air source heat pump installer in Scotland. When contacting these installers, please check with them whether they are also a MCS registered installer.

Energy efficient requirements

If your property’s energy report (please see below for further details) recommends that loft or wall insulation, or other energy efficiency measures, are needed, it is a requirement of the HES Scheme that such measures are installed before funding for low carbon heating can be claimed. But remember, you can apply for funding towards loft and cavity wall insulation under the HES Scheme.

Such energy efficiency requirements will help reduce the amount of heat escaping from your home, which in turn will help an air source heat pump heating system to work effectively. Visit our Knowledge Hub to learn more about the importance of minimising heat loss and how to get your home heat pump ready.

Energy report requirements

When you apply to Home Energy Scotland for a grant and/or loan, you will also need to provide an energy report which recommends the improvements which you are applying for. This report can be provided to you by a qualified Home Energy Scotland advisor. In you are applying for funding towards energy efficiency improvements, you will need to supply an Energy Performance Certificate (EPC) which your property may already have or you can contact an EPC assessor for a new one.

If you have any questions about applying for HES funding, you will need to contact Home Energy Scotland directly via www.homeenergyscotland.org/contact. Applications for HES grants or HES loans must be submitted and approved prior to any work commencing.

How do I repay the loan?

A HES loan is repaid via a monthly direct debit with the maximum repayment period determined by the amount borrowed. For example, loans up to the value of £4,999 need to be repaid within 5 years whereas loans of £10,000 or more need to be repaid within 12 years. Additional repayments can be made or the loan can be repaid in full at any time without fees or penalties. Grant funding is not repayable.

What are the benefits of renewable heating systems?

There are lots of advantages to making the move to renewable heating systems, which Government financial incentives, such the HES grant and loan, can support. Firstly, there is the environmental benefit with significantly reduced carbon emissions compared to homes using fossil fuel heating systems. Secondly, a renewable heating system can reduce a household’s dependency on fossil fuels which can provide financial savings depending on the fuel type and tariffs. Furthermore, heat pumps can be incredibly efficient when compared to other types of heating system.

Interested in learning more about heat pumps and their many benefits? Then please head over to our Knowledge Hub.

Find your local heat pump installer with Grant UK

Alongside their supply of highly efficient air-to-water heat pumps, Grant UK also supply complete renewable heating systems including hot water cylinders, heat emitters and solar thermal systems. Discover our full range of sustainable heating products here. If you are ready to take the next steps and speak to a local installer of renewable heating systems, please use our online find an installer search.

Helen Rishworth-Cutler
Content & Communications Manager at Grant UK
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