UK Heat Pump Grants in 2025: What Homeowners Need to Know to Save £7,500

UK Heat Pump Grants in 2025: What Homeowners Need to Know to Save £7,500

Fresh government incentives make it more appealing than ever for homeowners across England and Wales to make the switch from fossil fuel heating to heat pumps. The Boiler Upgrade Scheme (BUS) remains at the centre of this transition, now offering up to £7,500 in grants for eligible installations in 2025. With a dramatically increased budget. Confirmed at £295 million for the 2025/26 financial year. And new guidance from Ofgem, the scheme is poised to help thousands more reduce energy costs while improving home comfort.

Let's demystify what's changed, who can claim, the differences between air source and ground source heat pumps, what installation really costs across various UK regions, and how to get the most from your investment.

How the Boiler Upgrade Scheme Works in 2025

This year, the government responded to soaring demand by boosting funding and expanding the types of eligible heat pumps. The cornerstone offer is straightforward: claim up to £7,500 off the cost of a new air source or ground source heat pump. The process remains streamlined for homeowners:

  • You must own your property. This includes both owner-occupiers and private landlords.
  • The grant is available for replacing existing gas, oil, or electric heating with a qualifying heat pump.
  • Only properties in England and Wales qualify. Scotland and Northern Ireland offer separate schemes, with Scotland's Home Energy Scotland Grant often matching the BUS for value.
  • The heat pump must be installed by an MCS-accredited installer and meet minimum efficiency and performance standards. Most domestic systems are capped at 45kW thermal capacity.

Applications begin with your chosen installer, who will apply for the grant on your behalf. Once approved, Ofgem issues a voucher directly to the installer, who deducts the £7,500 from your final bill. Vouchers are valid for three months for an air source system and six months for ground source projects, reflecting the greater complexity of the latter.

Eligibility Criteria and Application Steps

To ensure you tick every box for eligibility, keep these points in mind:

  • The property must be your main home or a rental under your ownership. Business premises may also qualify in certain cases.
  • Your installer must be MCS certified.
  • The new system must fully replace any current fossil fuel heating setup.
  • The heating system must meet current efficiency requirements and be appropriate for your property's heat loss profile.
  • Council-owned housing isn't eligible; company-owned residential properties are accepted as of the 2025 guidance update.

When you're ready, reach out to your chosen MCS-accredited installer. They'll provide a tailored quote, submit your application to Ofgem, and manage the practicalities. Leaving you free to plan ahead for a warmer, more efficient home.

Air Source vs Ground Source Heat Pumps: Cost, Savings, and Suitability

Selecting the type of heat pump that fits your home and budget starts with understanding both air source and ground source options. The most common installation is the air source heat pump, appreciated for its relatively swift setup and more accessible pricing. Air source heat pumps draw warmth from the outside air even in cold temperatures, requiring outdoor space for the main unit, but not extensive groundwork.

On the other hand, ground source heat pumps use stable underground temperatures, extracting heat via a network of buried pipes. These systems require more land and a higher budget but deliver higher efficiency, as the earth's temperature remains steady throughout the year. If you have ample outdoor space, a ground source heat pump can yield lower running costs and greater savings over time. Especially for larger properties or off-grid homes.

Here's a quick comparison based on 2025 figures:

Air Source Heat Pumps (ASHP):

  • Average cost (before grant): £12,000-£16,000
  • With BUS grant: as low as £4,500-£8,500 out of pocket

  • Typical annual savings: up to £300 on energy bills, higher if you're switching from oil or electric heating systems

Ground Source Heat Pumps (GSHP):

  • Average cost (before grant): £18,000-£28,000
  • With BUS grant: £10,500-£20,500 after deduction
  • Greater long-term efficiency, with annual savings often exceeding those of air source systems

Air source heat pumps suit most urban or smaller suburban homes, whereas ground source systems shine in rural settings or larger plots. Both types are eligible for the £7,500 grant. So your decision hinges on space, upfront budget, and your priorities for long-term returns.

Regional Installation Costs and Savings Potential

When it comes to installation costs and savings from heat pumps, homeowners across the UK will notice regional differences. Labour rates, property styles, and local demand can all sway the final bill. In London and the South East, installation prices for air source heat pumps often trend higher, reflecting local demand and higher costs for skilled trades. Expect averages toward the upper end. Around £15,000 or more before grants. After claiming the BUS grant, figures as low as £7,500 are common, especially for flats or smaller homes.

In Wales, the North West, or parts of the Midlands, costs can drop to the £10,500-£13,000 range, making heat pump adoption more affordable, especially when paired with the government grant. Rural Scotland sees similar dynamics, though routes like the Home Energy Scotland scheme provide additional local support.

Ground source heat pump installation shows a similar pattern, but with a wider spread. From around £18,000 in parts of the Midlands or northern England to upward of £28,000 in London. Homeowners in rural areas with easier access for groundwork may save on excavation and piping, lowering project costs. With support, total investment can dip below £12,000 or reach £20,000 depending on system size and home requirements.

Long-term savings can be substantial. Replacing a gas boiler with a well-installed air source heat pump typically shaves around £260-£350 per year off energy bills for the average three-bedroom property. If you're converting from oil or direct electric heat, savings climb higher. Ground source systems push annual savings further, thanks to unmatched efficiency. Especially beneficial in larger homes or where winter temperatures are lower.

When fuel prices rise or your current heating is particularly inefficient, you're likely to see payback in under a decade, especially with BUS grant support decreasing upfront investment.

How to Select an Accredited MCS Installer and Maximise Your Investment

Quality installation is non-negotiable. Only systems fitted by Microgeneration Certification Scheme (MCS) accredited professionals qualify for the Boiler Upgrade Scheme grant, and for good reason. MCS accreditation verifies that your installer adheres to the latest regulations, provides clear consumer protection, and ensures you benefit from manufacturer warranties.

Here's what to prioritise when choosing an installer:

  • Always confirm MCS certification. Check the official MCS database for a list of approved UK installers.
  • Request detailed quotes from multiple providers. Compare pricing, expected scope of works, warranties, and aftercare options.
  • Look for installers that offer a site survey tailored to your property rather than a generic estimate. This signals a commitment to proper system sizing, a crucial factor for efficiency and reliability.
  • Prioritise companies with robust aftersales support and maintenance packages, so you're not left stranded if technical issues arise.

To get the most from your heat pump after installation:

  • Opt for smart controls and compatible heat pump cylinders to optimise running costs
  • Regularly service your system as recommended by your installer
  • Pair your system with insulation upgrades or low-temperature emitters like underfloor heating to maximise efficiency

Thorough planning, careful installer selection, and regular maintenance not only protect your investment. They unlock greater comfort and lower energy bills year after year.

Frequently Asked Questions

Can I receive the £7,500 heat pump grant if I live in Scotland or Northern Ireland?

No. Residents in Scotland and Northern Ireland are not eligible for the Boiler Upgrade Scheme. Scotland runs the Home Energy Scotland Grant, which offers a similar value and sometimes additional support. Northern Ireland homeowners may qualify for means-tested grants under the Northern Ireland Sustainable Energy Programme.

How long does the grant application process take?

Most installers can manage the application in just a few days. Once submitted, Ofgem typically processes and issues a voucher within two weeks, though busier periods might stretch this slightly. You have up to three months (air source) or six months (ground source) to complete your installation.

What happens if my property is a new build?

The Boiler Upgrade Scheme is focused on existing properties, not new builds. If your property is being built from scratch, check with your installer and local authority for available incentives or regional support schemes.

Are there extra grants or support available from local councils?

Some councils and regional authorities supplement the government grant with their own schemes or support for certain properties. Always ask your installer or search local council websites for the latest opportunities in your area.

Can I install the heat pump myself to save money?

DIY installation is not allowed if you want to receive the £7,500 BUS grant. The work must be fully handled and certified by an MCS-accredited installer to protect both your finances and your warranty.

Ready to Save on a Greener Home?

With the Boiler Upgrade Scheme's boosted grant now available, investing in a heat pump makes both financial and environmental sense. Careful selection of your system and installer can yield hundreds in annual savings, set you up for future-ready comfort, and shrink your home's carbon footprint all at once. Begin by connecting with reputable, MCS-accredited installers, exploring detailed heat pump cost breakdowns, and planning your project in detail. Every pound you save today goes further when it's supporting a warmer, more efficient future. Understanding whether heat pumps are truly worth it helps ensure your investment delivers maximum value for years to come.

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