Are there government grants for air source heat pumps?

Initially called the “Clean Heat” grant, “the Boiler Upgrade Scheme” aims to help people replace their boilers with an eco-friendly alternative like heat pumps. Running from April 2022 until April 2028, this scheme has replaced the Domestic Renewable Heat Incentive (RHI), which closed to new applicants on 31 March 2022.

What is the boiler upgrade scheme, and how does it work?

With this grant, homeowners in England and Wales can get £7,500 off the cost of a new air source heat pump from October 2023 and £7,500 off the price of a ground source heat pump.

The scheme will operate on a “first-come, first-served basis,” with customers pressured to register their interest with air or ground source heat pump installers soon. Overall, this scheme cuts in half the average air source heat pump costs from £10,000 to £5,000, which is a massive saving.

Unfortunately, the government is dedicating a relatively paltry £450 million to this scheme, meaning a maximum of just 90,000 homes will be able to take advantage of the grant over the next three years, so jump on it while you can.

As of the current day (March 2023), statistics for the Boiler Upgrade Scheme are fairly underwhelming. Out of the average of £150 million per year, Ofgem reports that only £54 million has been used in the first year from March 2022 – March 2023. That means the opportunity for you is still possible with plenty of time and funds available to secure your heat pump for your home.

Who’s eligible for the scheme?

All homeowners, small landlords, and private landlords will be eligible to apply for the grant. However, all applicants must have a valid Energy Performance Certificate (EPC). This certificate would need to have been issued in the last ten years, with no outstanding recommendations for loft or cavity wall insulation.

In previous years, homeowners could install heat pumps and get paid for the energy they produce by joining the government’s Renewable Heat Incentive (RHI) scheme. The scheme also covered biomass boilers and solar water heating systems. However, this initiative ended in March 2022 and has been taken over by the Boiler Upgrade Scheme.

The Scottish government’s Warmer Homes Scotland programme offers financial support to low-income households struggling to keep on top of energy bills.

How does it work?

Households can access the scheme by calling “Home Energy Scotland”, which will analyse the necessity of home improvements. All eligible households connect with Warmworks, the managing agent of the Warmer Homes grant. The scheme covers wall insulation, loft insulation, draught-proofing, boilers and heating, and renewable and micro-renewable heating systems.

Who’s eligible for Warmer Homes Scotland?

To get a heat pump grant through Warmer Homes Scotland, applicants must:

• Be a homeowner or the tenant of a private sector landlord.
• Live in the home as their main residence.
• Have lived there for at least 12 months.
• Live in a home that is no bigger than 230 square metres, with an energy rating of 67 or lower.
• Live in a home that meets the tolerable living standard set out in the Housing (Scotland) Act 2006.
• Not have received support for energy efficiency improvements through Warmer Homes Scotland funding in the last five years.

The individual must also be one of the following:

• A pensioner who has no working heating system and receives a passport benefit.
• Aged 75 or older and in receipt of a passport benefit.
• Pregnant, caring for a child under 16, and receiving a passport benefit.
• Someone with a disability and who receives any level of Personal Independent Payment (PIP).
• Someone with a disability and who receives a high-rate Disability Living Allowance (DLA).
• Someone with a disability, who is also in receipt of a low/medium rate Disability Living Allowance (DLA), and in receipt of an income-related benefit.
• A carer with Carers Allowance.
• Someone who has been injured or disabled serving in the Armed Forces and who receives Armed Forces Independence Payment/War Disablement Pension.
• Someone injured or with a disability from an accident or disease caused by work and receiving Industrial Injuries Disablement Benefit.

Created by the Welsh Government, Nest aims to reduce the impact of fuel poverty in Wales by making low-income homes more energy efficient. 

How does it work?

If a household is struggling to pay energy bills, they can call Nest’s helpline (run by the Energy Saving Trust), which analyses whether they’re eligible for support. If the household meets certain criteria, they will be referred to British Gas, which will then conduct a “whole house assessment”, a property survey that analyses which home improvements should be made.

The benefits available under the Nest scheme include:

• A new central heating system.
• A new energy-efficient boiler.
• Cavity wall insulation.
• External wall insulation.
• Internal wall insulation.
• Loft insulation.
• Room thermostats and heating controls.
• Water tank and pipe insulation.
• Air source heat pump.
• Ground source heat pump.
• Draught-proofing.

Who’s eligible for Nest?

If you’d like to get support from Nest, you must:

• Own or privately rent your home (not from a local authority or housing association).
• Have an energy-inefficient home that is expensive to heat.
• Receive a means-tested benefit, or have a chronic respiratory, circulatory, or mental health condition.

The means-tested benefits that qualify are:

• Child Tax Credit (with an income below £16,105 a year).
• Council Tax Reduction.
• Housing Benefit.
• Income-based Jobseeker’s Allowance.
• Income-related Employment and Support Allowance.
• Income Support.
• Pension Credit.
• Universal Credit.
• Working Tax Credit (with an income below £16,105 a year).