Heat Pump Costs & Grants
Everything you need to know about heat pump costs and available government grants in the UK
Boiler Upgrade Scheme (BUS) Grant
The UK Government's Boiler Upgrade Scheme helps homeowners in England and Wales switch from fossil fuel heating to low-carbon alternatives. The scheme runs until March 2028, with 0% VAT on installations until March 2027.
| Technology | Grant Amount |
|---|---|
| Air Source Heat Pump | £7,500 |
| Ground Source Heat Pump | £7,500 |
| Biomass Boiler | £5,000 |
| Air-to-Air Heat Pump | £2,500 |
| Heat Battery | £2,500 |
How it works: Your MCS-certified installer applies on your behalf. The grant is deducted from your quote, so you only pay the remaining balance.
Running Costs: Heat Pump vs Gas Boiler
A common concern is whether heat pumps cost more to run. In 2025, running costs are roughly comparable thanks to the efficiency advantage of heat pumps.
Gas Boiler
- Energy price: 7p/kWh
- Efficiency: ~90%
- Typical annual cost: ~£900
Air Source Heat Pump
- Energy price: 30p/kWh
- Efficiency (COP): 300-400%
- Typical annual cost: ~£930–£1,000
Ways to reduce heat pump running costs
- Solar panels – Generate your own electricity to power the heat pump
- Smart tariffs – Save ~£240/year with tariffs like Octopus Cosy
- No gas standing charge – Save £124/year by going fully electric
- Future savings – Green levies moving off electricity could save £300/year
Environmental Impact
Switching from a gas boiler to a heat pump significantly reduces your carbon footprint:
- 70% reduction in heating emissions
- 2 tonnes of CO₂ saved annually per household
As the UK electricity grid continues to decarbonise, these savings will increase over time.
Scotland: Home Energy Scotland
If you live in Scotland, you can access the Home Energy Scotland Grant and Loan scheme:
- £7,500 grant (non-repayable)
- £7,500 interest-free loan (optional)
- Additional £1,500 for qualifying rural properties
Combined, this provides up to £16,500 in support for Scottish homeowners.
Frequently Asked Questions
You're eligible if you:
- Own your property in England or Wales
- Have a valid EPC issued within the last 10 years
- Currently use fossil fuel heating (gas, oil) or electric heating without a heat pump
- Are installing a system up to 45kWth capacity
Private landlords and second homeowners are also eligible. Social housing and new builds (except certain self-builds) are not eligible.
Ready to see what you could save?
Get a free, personalised analysis of your property's solar and heat pump potential.
Analyse Your Property