The number of heat pumps installed in people’s homes is growing, but there’s still a (very) long way to go.
This week the Climate Change Committee (CCC), which advises the government, said half of homes should have heat pumps within 15 years, while four in five cars should be electric, also by 2050.
By law, the UK must reach "net zero" by 2050.
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While the government considers the CCC’s advice about rapidly increasing the number of heat pumps in our homes and electric vehicles on our roads, it’s prompted a discussion about how heat pumps work, their cost and how many are already in people’s homes.
About 1% of homes are powered by a heat pump, according to the CCC. So, it’s a very big jump to get to 50% in 15 years’ time.
Many of those working today would have been installed in the past few years using the government’s £7,500 grant. About 44,000 air source and ground source heat pumps were installed with the grant between May 2022 and January 2025, according to government statistics.
Last year, about 2,000 vouchers were redeemed each month towards the cost of a heat pump, roughly double the number in 2023.
Despite the rise in heat pump installations, the National Audit Office (NAO) has previously criticised the low take-up, saying sales will need to increase significantly to meet government targets.
It attributes the low number of heat pumps in people’s homes to several factors, including limited public awareness of the technology, higher costs compared to gas boilers, and the absence of long-term financial support for UK households.
With a wealth of price increases coming up in April, such as council tax rises, mobile and broadband hikes and higher water bills, you might be worried about the cost of getting a heat pump. However, there are ways to reduce the installation costs.
If you’re thinking about installing a heat pump, we run through how they work and what financial support is on offer. As well as the government grant, you may find your mortgage lender offers cashback or your energy supplier has an incentive.
How do heat pumps work?
Heat pumps allow you to heat your home and provide hot water in an environmentally-friendly way. They are significantly more efficient than gas boilers, and produce less CO2 emissions than other heating systems. According to the Energy Saving Trust, for every unit of electricity a heat pump uses, it produces three units of heat.
Heat pumps also last longer than gas boilers, typically running for 20 years compared to the 10 to 15 years you'll get from a boiler.
There are two main types of heat pump: air source and ground source. Air source pumps heat the air outside, and are the most common in the UK. Ground source heat pumps transfer heat from the ground outside to heat your home.
How much does it cost to install a heat pump?
The average cost of installing an air source heat pump is around £13,000, according to official figures. Ground source heat pumps are considerably more, at about £28,000 on average.
The government’s Boiler Upgrade Scheme offers a grant of £7,500 towards this cost, which means you could still pay £5,500 for an air source heat pump (based on the average installation cost).
However, for some customers, the cost can be thousands more depending on the type and size of their home. A bigger property may need a bigger, more expensive heat pump, for example. Replacing radiators or adding insulation can also push the price up.
According to Octopus Energy, about a third of homes require scaffolding - this is usually required when the hot water cylinder is installed at a height, either upstairs or in the loft. This can add on an extra £800 to £1,000. Planning permission may also be needed, which can cost between £250 and £330.
On the other hand, the bill can come in a lot cheaper for some people. Octopus Energy advertises a “£500 heat pump” deal, once the government grant is taken off. Not all homes are eligible though. About 10-15% of UK homes qualify for the £500 quote, says Octopus; these homes fall into several categories: newer homes, smaller homes, better insulated properties, those with low energy usage, and those which require fewer changes (like radiator swaps) to make the switch.
The supplier says costs will be higher for larger or more complex homes, but nearly all its quotes are less than the national average of £5,565.
How does the government’s £7,500 grant work?
The government’s Boiler Upgrade Scheme gives eligible households up to £7,500 off the cost of installing a heat pump.
If you’re buying an air source or ground source heat pump for a home or small non-domestic building in England or Wales, and you’re replacing an existing fossil fuel system (such as an oil or gas boiler, or storage or panel heaters), you should be eligible for the full £7,500.
Note that the property must not be a new-build or social housing, although self-build properties are eligible.
The heat pump installer - who must be MCS-certified - applies for the grant and takes it off the price you pay.
If you live in Scotland, the Home Energy Scotland grant and loan scheme pays up to £7,500 for air-source heat pumps, plus a further £1,500 for households that qualify for a rural uplift. An extra £7,500 of funding is available as an optional interest-free loan.
What other discounts are available?
In addition to the £7,500 government grant, there are some lesser-known incentives and discounts for installing a heat pump. The biggest ones could come from your mortgage provider. Here are some of the deals available:
- Halifax mortgage customers can get £2,000 via the bank’s “Green Living offers”. You’ll need to have applied for a mortgage or additional borrowing with Halifax after 31 July 2024, and have a Halifax or Bank of Scotland current account, to qualify.
- Barclays’ Greener Home Reward scheme also pays £2,000 cashback for customers installing a heat pump. To be eligible, you must have a Barclays residential mortgage with a direct debit and up-to-date payments.
- Nationwide offers its mortgage customers interest-free loans worth between £5,000 and £20,000 to pay for energy-efficient improvements, such as air source heat pumps and insulation. Borrowers can enjoy a 0% period for the first two or five years.
- Ovo offers up to a year of free heating for customers planning to get a heat pump in future. The energy supplier’s Beyond scheme allows customers to “bank” one month of free heating for every two months they are with Ovo; the money can be redeemed (worth a maximum of £342) when a heat pump is purchased from Ovo.
- E.on offers interest-free finance for heat pump installation.
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