The Renewable and Low Carbon Energy website

for farmers and landowners

Grants for heat pumps offered as part of Government’s Heat and Buildings Strategy

Case Studies

The Department for Business Energy & Industrial Strategy (BEIS) have set our Government’s plans to decarbonise home heating through their Heat and Buildings Strategy, which offers homeowners a £5,000 grant to assist with the replacement of gas boilers with low-carbon heat pumps.

Ministers have said that the aim is for homeowners to pay a similar sum for a new heat pump as they would for a new gas boiler.

A total of £450m is being put aside for the 3-year ‘Boiler Upgrade Scheme’ scheme, available from April 2022, part of a £3.9 billion pot to reduce carbon emissions from heating homes and other buildings, ultimately leading to the phasing out of gas boilers by 2035. 

The government has also stated its’ intention to work with businesses to improve technologies and scale up production, with a £60 million ‘Heat Pump Ready’ innovation programme being launched to make clean heat systems smaller, easier to install and cheaper to run. This innovation fund will be financed by the £1bn package for net-zero technologies announced by Chancellor Rishi Sunak in this year’s Budget.

Business and Energy Secretary Kwasi Kwarteng said:

“Recent volatile global gas prices have highlighted the need to double down on our efforts to reduce Britain’s reliance on fossil fuels and move away from gas boilers over the coming decade to protect consumers in long term.

“As the technology improves and costs plummet over the next decade, we expect low carbon heating systems will become the obvious, affordable choice for consumers. Through our new grant scheme, we will ensure people are able to choose a more efficient alternative in the meantime.”

Industry reaction has generally been positive, with Laura Bishop, Chair of the Ground Source Heat Pump Association, saying:

“The Ground Source Heat Pump Association warmly welcomes the release of the Heat and Buildings Strategy. We look forward to a consistent policy environment which will drive growth in our sector and the UK economy on the path towards achieving Net Zero.

“Ground source heat pumps represent a long-term infrastructure asset which delivers unrivalled efficiencies in generating clean heat, and we hope the policy will underpin the mass market roll out we have been anticipating for some time.”

Phil Hurley, Chair of the Heat Pump Association, said:

“The heat pump industry warmly welcomes these bold steps forward. The industry in the best shape it has ever been, with sales this year already double those seen ever before.

“Today’s announcement will give industry and installers a huge confidence boost that now is the time to scale-up and retrain in preparation for the mass roll out of heat pumps, as well as making heat pumps as affordable as boilers, so all consumers can soon access and enjoy the benefits of affordable, reliable low carbon heating that stands the test of time.”

Chief Executive of E.ON UK Michael Lewis said:

“With the right policy framework in place, we’re confident the cost of a heat pump can be reduced by up to half over the coming years. We welcome proposals in the Heat and Buildings Strategy which are designed to tackle this issue head-on, making the green option the default option.

“Once we have mass demand, commercial innovation in installation and economies of scale will take over to reduce costs and give customers greater confidence in what is already a tried and trusted technology for many around the world.”

Ministers have also stated their desire to reduce the price of electricity over the next decade, by shifting levies away from electricity to gas. A call for evidence is expected to be published with decisions made in 2022.


Advice & Opportunities