Heat pumps are a highly efficient and environmentally friendly way to heat homes and businesses, reducing energy bills and cutting carbon emissions. However, the initial installation cost can be off-putting to some property owners. Fortunately, the UK government offers grants, incentives, and funding schemes to make the transition to renewable heating more affordable.
Greenfields is an MCS-certified heat pump installer, so we can help our customers access government funding for heat pump installations. Whether you’re considering an air, ground, or water-source heat pump, our team provides expert guidance on available funding options and ensures a smooth installation.
We’re based in Penrith, Cumbria, but we serve customers nationwide. Contact us or visit our office to discuss your options.
Let’s look at some of the grants, incentives, and funding schemes available to customers in the UK.
1. Boiler Upgrade Scheme (BUS) – Grants Of Up To £9,000 Available
The Boiler Upgrade Scheme (BUS) is the UK government’s primary incentive for replacing fossil fuel heating systems with low-carbon alternatives, such as heat pumps.
How It Works:
- Homeowners and small businesses in England and Wales may be eligible for government support through the Boiler Upgrade Scheme (BUS), with grants of up to £9,000 available towards qualifying air, ground, or water source heat pump installations. Eligibility and grant values depend on the existing heating system and current scheme requirements. If you are a business looking to upgrade your heating system, visit our Commercial Heat Pump Installation page.
- The system must replace an existing fossil fuel heating system (gas, oil, or LPG) and must be installed by an MCS-certified installer, such as Greenfields Heat & Power Ltd.
- Your property must have a valid Energy Performance Certificate (EPC).
Grant Amounts:
Grant support available through BUS depends on the existing heating system being replaced and the current scheme criteria.
Eligible installations may receive up to £9,000 towards the cost of a qualifying heat pump installation.
Our team can explain current grant levels and confirm eligibility during the quotation process.
Exclusions:
The BUS grant does not apply to:
- Hybrid heating systems (e.g., a combination of a gas boiler and heat pump).
- Replacing an existing low-carbon heating system.
- Systems over 45kW in capacity (most domestic and small business installations fall within the limit).
- Properties that have already received government funding for a heat pump (e.g., through the ECO4 scheme). However, funding for unrelated energy efficiency measures, such as insulation, does not disqualify applicants.
How Greenfields Can Help
We assess your eligibility and guide you through the BUS grant application process. Because grant criteria can change, our team can explain what support may be available based on your property and existing heating system.
Our expert team installs MCS-certified heat pumps that meet all requirements. We offer tailored heating solutions to ensure you choose the right system for your home or business.
2. The Energy Company Obligation (ECO4) Scheme – Fully or Partially Funded Heat Pumps
The ECO4 scheme is a government energy-efficiency program that helps low-income and fuel-poor households improve the energy performance of their homes. This funding may sometimes be used to install heat pumps alongside other improvements.
Eligibility:
- Homeowners or private tenants (landlord permission required).
- Households receiving certain government benefits (e.g., Universal Credit, Pension Credit, Child Benefit, or Income Support).
- The property must have a low energy efficiency rating (EPC rating of D, E, F, or G).
How Greenfields Can Help
While ECO4 funding is arranged through an external provider, we can install heat pumps for eligible customers under this scheme. We work with third-party funding organisations that administer ECO4 funding. If you think you may qualify, contact us; we can help determine the next steps.
3. 0% VAT on Heat Pump Installations – Tax Savings Until 2027
To further encourage the adoption of renewable heating, the UK government has reduced VAT to 0% on heat pump installations for homeowners. This tax relief applies to both the cost of the heat pump itself and the installation, making switching to renewable heating more affordable. However, any additional work, such as upgrading radiators or modifying pipework, may still be subject to VAT at the standard rate.
How Greenfields Can Help
We automatically apply the 0% VAT rate to eligible installations, ensuring you benefit from the maximum savings. Our team provides detailed cost breakdowns so you understand exactly how much you’ll save. By handling compliance with VAT exemption rules, we make the process straightforward, so you can focus on enjoying a more energy-efficient heating system at a lower upfront cost.
4. Local Authority Grants for Heat Pumps
Some local councils offer additional grants or low-interest loans to encourage heat pump installations. These schemes vary by local authority but are often aimed at improving home energy efficiency and reducing carbon emissions.
How to Check Availability:
- Visit your local council’s website and search for “renewable energy grants” or “home energy efficiency funding.”
- Some councils offer funding for low-income households or subsidies for energy-efficient home upgrades.
- Example: The Greater London Authority has previously provided grants through the Warmer Homes Programme, helping eligible homeowners fund low-carbon heating solutions such as heat pumps. Other councils have offered similar schemes.
How Greenfields Can Help
We help check for local funding opportunities, ensuring you don’t miss out on potential financial support. If your local council offers heat pump grants, we provide the MCS certification required for eligibility and assist with the grant application process. Our team ensures your installation meets all necessary guidelines so you can maximise your savings.
5. Financing Options for Heat Pumps
If grants are not available, financing options can make heat pump installations more affordable. Many banks and financial institutions offer green home improvement loans, allowing homeowners to spread the cost over time. Some Buy Now, Pay Later options are available through energy-efficiency schemes, while certain energy-saving mortgages offer lower interest rates for eco-friendly home upgrades. Exploring these financing options can help make investing in a heat pump more accessible.
Why Choose Greenfields for Your Heat Pump Installation?
✅ MCS-Certified Installers – Ensuring eligibility for grants and incentives.
✅ Expert Guidance – We simplify grant applications and funding processes.
✅ Comprehensive Service – From initial consultation to installation and aftercare.
✅ Bespoke Heating Solutions – We install air source, ground source, and water source heat pumps.
✅ Trusted and Experienced – A leading UK heat pump provider with a reputation for quality.
Get Started Today – Speak to Greenfields
Government grants and funding options may help reduce the upfront cost of installing a heat pump. Whether you’re looking to cut energy bills, reduce carbon emissions, or upgrade your heating system, we’re here to help. Our team can help you choose the best system for your property. Contact us today, and we’ll guide you through the process.