A heat pump grant can take thousands of pounds off the cost of switching to low-carbon heating. In England and Wales the main scheme is the £7,500 Boiler Upgrade Scheme; in Scotland, Home Energy Scotland offers grants of up to £9,000 for rural homes; and heat pumps installed in homes across Great Britain pay 0% VAT. This guide covers every government grant for heat pumps, side by side, with the rules on who qualifies.
At a glance: every scheme in 2026
| Scheme | Where | What you get | Means-tested? |
|---|---|---|---|
| Boiler Upgrade Scheme (BUS) | England & Wales | £7,500 off an air source, ground source or water source heat pump | No |
| 0% VAT on energy-saving materials | Great Britain | No VAT on installation until 31 March 2027 | No |
| Home Energy Scotland Grant & Loan | Scotland | Up to £7,500 grant, plus £1,500 rural uplift (up to £9,000), and an optional interest-free loan | No |
| Nest | Wales | Fully funded improvements, which can include a heat pump | Yes |
| Warm Homes: Local Grant and supplier schemes | England / Great Britain | Funded upgrades for eligible lower-income homes, run by councils and energy suppliers | Yes |
The Boiler Upgrade Scheme: £7,500 off
The Boiler Upgrade Scheme is the main government grant for heat pumps in England and Wales. It pays towards a low-carbon heating system that replaces your existing fossil fuel boiler:
- £7,500 for an air source heat pump (air to water)
- £7,500 for a ground source heat pump, including water source heat pumps and systems on shared ground loops
- £5,000 for a biomass boiler (rural, off-gas homes only)
There's no income test: homeowners, private landlords and small businesses can all claim. You don't apply yourself. Your installer requests the voucher from Ofgem and takes the £7,500 off your invoice, so you only ever pay the balance.
Eligibility criteria: who is eligible for the Boiler Upgrade Scheme (BUS)?
- You own the property in England or Wales (homeowner, landlord or small business).
- You're replacing an existing fossil fuel system (gas, oil or LPG) or direct electric heating, such as storage heaters.
- The property has a valid Energy Performance Certificate (EPC) from the last 10 years. Since May 2024 there's no requirement to fit loft or cavity insulation first.
- The heat pump meets the property's full heating and hot water needs, up to 45 kW.
- The heat pump and installer are certified under the Microgeneration Certification Scheme (MCS).
What isn't covered
- Replacing an air source heat pump (or any existing heat pump) with a new one.
- Hybrid systems that keep a gas or oil boiler alongside the heat pump.
- Most new-build homes (custom self-builds can qualify) and social housing.
- Properties that have already had government funding for a heat pump, including a heat pump funded under other schemes.
In short, the scheme exists to help households replace fossil fuel heating systems with low-carbon ones. Read our full Boiler Upgrade Scheme guide for a step-by-step walk-through of the application.
0% VAT on heat pumps
Heat pumps installed in homes are zero-rated for VAT until 31 March 2027. It isn't something you claim: it's built into every quote. On a typical installation it saves around £2,000 compared with the standard 20% rate, and it applies on top of the Boiler Upgrade Scheme.
Scotland: Home Energy Scotland Grant and Loan
The Boiler Upgrade Scheme doesn't apply in Scotland. Instead, Home Energy Scotland offers a grant of up to £7,500 towards a heat pump, with an extra £1,500 rural uplift for eligible rural homes, so grants of up to £9,000 are possible. An optional interest-free loan can cover the rest. You apply through Home Energy Scotland before any work starts, and must use an MCS-certified installer.
Wales: Boiler Upgrade Scheme and Nest
Welsh homeowners can use the Boiler Upgrade Scheme exactly as in England. Households on lower incomes, or with certain health conditions, may also qualify for free energy-efficiency improvements, sometimes including a heat pump, through the Welsh Government's Nest scheme.
Help for lower-income households in England
In England, the Warm Homes: Local Grant is delivered by participating councils to lower-income households in homes with poor energy ratings, and can fund heat pumps and insulation. Energy supplier schemes have also funded heating upgrades for some vulnerable households. Availability varies by area, so check with your local council and energy supplier.
How much does a heat pump cost after the grant?
| Home | Installed cost | After £7,500 grant |
|---|---|---|
| 1 to 2 bed flat or terrace | £8,000 to £11,000 | £500 to £3,500 |
| 3 bed semi-detached | £10,000 to £13,000 | £2,500 to £5,500 |
| 4 bed detached | £12,000 to £16,000 | £4,500 to £8,500 |
See the full air source heat pump cost guide for running costs and prices by house size.
How to apply
- Check your eligibility. Our 60-second form tells you whether you're likely to qualify.
- Get a valid EPC if you don't already have one from the last 10 years.
- Book a survey with an MCS installer. They calculate your home's heat loss and quote with the grant deducted.
- Accept the quote. In England and Wales your installer applies to Ofgem; in Scotland you apply to Home Energy Scotland first.
- Confirm with Ofgem when they email you, then your heat pump is installed and the grant is redeemed.
Tips to get the most from government funding
- Don't start work before the grant is approved: some schemes, including Scotland's, won't pay retrospectively.
- Compare like-for-like quotes: ask each installer for the heat loss, unit size and expected SCOP, not just the price.
- Switch to a heat pump tariff after installation to cut running costs further; see our heat pump tariff comparison.
- Consider solar panels alongside your heat pump: they aren't covered by the Boiler Upgrade Scheme, but they can power the heat pump during the day and cut bills further.
Quickest route: our 60-second eligibility check tells you whether you're likely to qualify, and an MCS-certified installer will confirm with a free survey.
Sources
Grant amounts, VAT rules and eligibility are set by government and the scheme administrators. We check them against these primary sources:
- Apply for the Boiler Upgrade Scheme (GOV.UK)
- Boiler Upgrade Scheme (BUS) (Ofgem)
- VAT on energy-saving materials and heating equipment (VAT Notice 708/6) (GOV.UK)
- Home Energy Scotland grant and loan (Home Energy Scotland)
- Get help with energy efficiency in your home (Nest) (Welsh Government)
- Find an energy certificate (EPC) (GOV.UK)
- Microgeneration Certification Scheme (MCS)
New to the jargon? See the heat pump glossary, or browse the heat pump FAQs.
Written by the GetASHP team. Prices and grant details checked 27 October 2026; always confirm current figures with your installer.
