Hundreds of thousands of households can now apply for a £9,000 grant towards the cost of installing a heat pump.
Property owners with central heating systems powered by heating oil or Liquefied Petroleum Gas (LPG) have been able to apply for the boosted grants since 21 July 2026.
Those replacing traditional gas boilers can get £7,500 off the cost of installation.
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The support comes via the government’s Boiler Upgrade Scheme (BUS) which was set up to incentivise people to get heat pumps installed in their properties and push the UK economy towards net-zero.
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According to the 2023/24 English Housing Survey, just 1% of homes in England have a heat pump, but the BUS appears to be increasing uptake.
There were a record 60,000 MCS-certified heat pump installations in 2025 and over 130,000 BUS applications have been made since its launch in May 2022.
How do heat pumps work?
Heat pumps generally work by taking heat from the ground or air and transferring it to your central heating system.
They are significantly more efficient than traditional gas boilers and produce less carbon emissions.
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.
Heat pumps that take heat from the air are called air source heat pumps while those that take it from the ground are called ground source heat pumps. Both types provide hot water for your taps and shower.
You can also get air-to-air heat pumps which heat your home as well as cool it during hotter weather, but they generally don’t provide hot water for your taps and shower.
How much does it cost to install a heat pump and what grants can you get?
The median cost of installing an air source heat pump is roughly £13,000, according to official government figures.
Ground source heat pumps are considerably more expensive to get installed, at a cost of about £27,000, although it generally costs less to run them than air source heat pumps after installation, according to the Energy Saving Trust.
A heat pump may be more or less expensive to install depending on other factors like the type, size and age of your home, whether you need planning permission and if radiators need replacing.
The BUS grants, available to households in England and Wales, can go some way to cover these installation costs, but the grant amounts vary depending on which type you’re getting.
If you’re buying an air or ground source heat pump for a home and you’re replacing an existing fossil fuel system (such as a gas boiler, or storage or panel heaters), you should be eligible for £7,500.
Since April 28, 2026, grants of up to £2,500 have also been available if you want an air-to-air heat pump installed in your home.
As of 21 July, if you’re replacing an oil or a Liquefied Petroleum Gas (LPG) system you can get a £9,000 grant for an air or ground source heat pump. You can apply for these grants until March 2027 and the government estimates 200,000 households are eligible for them.
The heat pump installer – who must be MCS-certified – applies for the grant on your behalf 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 if you live in a rural area. An extra £7,500 of funding is available as an optional interest-free loan.
What other discounts are available?
In addition to the £9,000 government grant in England and Wales, 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:
- Lloyds customers can get £2,000 cashback with the Eco Home Reward for installing an air or ground source heat pump. To qualify, you’ll need to have completed on your mortgage, additional borrowing or product transfer in the last 12 months and be a residential owner-occupier of the property. Buy-to-let properties are excluded from the offer.
- Barclays’ Greener Home Reward scheme also pays £1,000 cashback for customers installing a heat pump. To be eligible, you must have a Barclays residential mortgage and the heat pump must be installed by a MCS-certified business.
- 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 through its Beyond scheme.
- E.on Next offers interest-free finance for heat pump installation.
- The government will offer low and zero-interest loans to people installing heat pumps in their homes through the Warm Homes Plan. Exact details on these loans are yet to be unveiled by the government, correct at the time of writing on 23 July, 2026.
