What grants are there for air source heat pumps?

England and Wales – the Boiler Upgrade Scheme

The Boiler Upgrade Scheme was introduced in April 2022 (replacing previous schemes called the Renewable Heating Incentive and the Clean Heat Grant).

The scheme gives homeowners in England and Wales £7,500 to help with the cost of upgrading from a fossil fuel boiler to a low-carbon alternative like an air source heat pump.

Who is eligible?

You can get the grant if:

• You own the property
• You’re replacing a fossil fuel system (e.g. gas, oil or LPG boiler)
• Your property has a valid Energy Performance Certificate (EPC)
• Your EPC has no outstanding recommendations for loft or cavity wall insulation (we can help with this if you need it)

How to apply

It’s very easy. British Gas will check you’re eligible when you enquire about a heat pump. Then we’ll manage the grant application for you and include the £7,500 as a discount in your overall price.

Scotland – Home Energy Scotland

The Scottish system for heat pump grants is a little different. Homeowners can apply directly to Home Energy Scotland for grants of up to £7,500 (or £9,000 in some remote areas) – and they can also apply for interest-free loans of up to £7,500 more should there be any outstanding cost.

Unlike the Boiler Upgrade Scheme in England and Wales, your installer can’t apply for the Scottish grant on your behalf. You need to apply for it yourself, although British Gas can give you plenty of advice about how to go about it.

How does the scheme work?

A typical heat pump costs between £7,000 to £13,000 to install, so let’s imagine your heat pump costs £10,000.

Your grant will cover £7,500 of that and you can get an interest-free loan for the other £2,500. This could then be paid back over five years, which would mean monthly instalments of £41.66.

And the more you need to borrow, the longer the maximum term of the interest-free loan:

• Under £5,000 – 5 years
• £5,000 - £9,999 – 10 years
• Over £10,000 – 12 years

You can pay the loan back more quickly than the maximum if you wish – and you can also pay the loan off early at no extra cost. So it’s a very flexible way of spreading the cost of your investment in a new heat pump.

Who is eligible?

The scheme is open to all homeowners in Scotland (but not landlords, businesses or property developers).

You’ll need to get an Energy Performance Certificate (EPC) for your property before and after the installation, as proof that the heat pump was installed.

Although applying for the grant yourself might seem complicated, the British Gas team will be able to talk you through what’s involved – and also give you a good idea of whether your application is likely to be successful.

How to apply

Simply contact Home Energy Scotland and talk to one of their advisers. They’ll spend about 30 minutes taking some details, discussing your options and explaining the next steps.

England – the ECO scheme

ECO (sometimes called ECO4) is the latest version of the Energy Company Obligation scheme.

It’s designed to help low-income homeowners and renters to improve the energy efficiency of their homes, giving them lower energy bills and smaller carbon footprints. ECO can help with home improvement measures like insulation as well as with heat pumps.

Who is eligible?

To get support, you’ll need to live in a home that has an Energy Performance Certificate (EPC) of D or below. You’ll also need to receive one of these benefits:

• Pension Guarantee Credit
• Income-related Employment and Support Allowance (ESA)
• Income-based Jobseeker's Allowance (JSA)
• Income Support
• Tax Credits (Child Tax Credits and Working Tax Credits)
• Universal Credit
• Housing Benefit
• Pension Credit Saving Credit

How to apply

Although it’s a government scheme, ECO is the responsibility of energy companies (which is why it’s called the Energy Company Obligation).

And you don’t have to be a customer of an energy supplier to get help from them. You can apply to any of the energy companies listed on this OFGEM web page for ECO support.

To get funding from British Gas, visit our website and fill in the form to get started. Or if you prefer to use another energy company, just search their name and ‘ECO scheme’ to learn the next steps.

Wales – the Nest scheme

Nest is the Welsh Government’s scheme that provides advice and grants for home energy-efficiency improvements. It can help towards the cost of upgrades like new boilers, central heating systems, insulation, solar panels – and heat pumps.

Who is eligible?

You can apply for a grant if:

• You own or privately rent your home (not from a local authority or housing association)
• Your home isn’t energy efficient and costs a lot to heat

You’ll also need to:

• Have a chronic respiratory, circulatory or mental health condition and be on a low income

Or

• Have someone in the household who receives one of these benefits:

• Child Tax Credit (income below £16,105 a year)
• Council Tax Reduction (exemption and discount do not qualify on their own)
• Housing Benefit
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Income Support
• Pension Credit
• Universal Credit
• Working Tax Credit (income below £16,105 a year)

How to apply

Nest has a team of advisers. Just call the freephone number on the Nest website and they’ll guide you through every step of the application.

Scotland – Warmer Homes Scotland

Warmer Homes Scotland is the government’s programme designed to help people who are finding it hard to stay warm and pay energy bills.

They’ll arrange an expert visit to your home, to work out which insulation and heating improvements are right for you, including heat pumps. In most cases, all costs are met by the Scottish Government.

Who is eligible?

The scheme is open to homeowners and private tenants in Scotland. You’ll need to:

• Have lived in your home for at least six months
• Have a home with a poor energy rating
• Additionally, you’ll need to meet one of the following criteria:
• Over 75 with no central heating
• Certified DS1500 or BASRiS by a medical professional
• Receiving benefits (e.g. Universal Credit, Carer’s Allowance, Housing Benefit)

How to apply

To get help from Warmer Homes Scotland, you first need to contact Home Energy Scotland. They’ll check your eligibility and then organise an assessment of your home by an organisation called Warmworks. They’ll then work out a plan for making any changes to your home.