Do Government Grants Cover Heat Pump Installation?

Short answer? Rarely in full. But here’s what most people miss: you’re probably leaving money on the table.

Government grants won’t hand you a free heat pump. They will, however, slash your costs by £7,500 to £10,000+ if you know which schemes to stack. By utilizing Grants for Air Source Heat Pumps, the Boiler Upgrade Scheme and ECO4 are doing the heavy lifting right now. Let’s cut through the noise.

What Grant Schemes Actually Deliver

The UK runs two primary schemes worth your attention. Each has different rules, different pockets they pull from, and different amounts they’ll actually pay.

The Boiler Upgrade Scheme (BUS): £7,500 Flat

This is the workhorse. It offers £7,500 toward air source or ground source heat pumps. Period. No income tests. No EPC hoops to jump through (starting 2026).

You qualify if you own your home in England or Wales and you’re ditching a fossil fuel system. Gas boiler? Oil tank? You’re in. Already running electric storage heaters? You’re out.

The scheme runs until April 2028. Apply through an MCS-certified installer who handles the voucher directly. Your upfront cost drops by £7,500 at checkout.

Here’s the math: Average air-to-water heat pump install costs £8,000 to £14,000. BUS covers 50-95% depending on system complexity. Ground source systems run £20,000+, so you’re still paying £12,500 out of pocket even with the grant.

ECO4: Full Coverage for Low-Income Homes

This one’s means-tested. Brutal honesty? Most homeowners won’t qualify.

ECO4 targets households on benefits—Universal Credit, Pension Credit, Child Benefit with income under £31,000. If you’re eligible and your home has an EPC rating between D and G, the scheme can fund 100% of your heat pump plus insulation upgrades.

It ends March 2026. The replacement—Warm Homes Plan—launches shortly after with similar mechanics but broader scope.

Who pays? Energy suppliers, via their legal obligation to reduce carbon emissions. You don’t bill the government directly. An approved installer arranges everything through the supplier.

Scheme	Max Grant	Income Test?	Full Coverage?
BUS	£7,500	No	Rarely
ECO4	100% of costs	Yes	Yes (if eligible)
Warm Homes Plan	£7,500 + 0% loans	Yes	Partial to full

Who Qualifies—And Who Doesn’t

Think you’re eligible? Let’s find out in 30 seconds.

BUS Eligibility: Simpler Than You Think

• Own the property? Check.
• Replacing gas, oil, or LPG heating? Check.
• Property in England or Wales? Check.

Done. That’s it. No income caps. No EPC minimums after February 2026 (currently C+ requirement expires).

Renters need written landlord permission. Social housing tenants should check with their local authority—separate schemes often apply.

ECO4 Eligibility: Benefits Required

At least one household member must receive qualifying benefits:

• Universal Credit
• Pension Credit
• Child Tax Credit (income under £31,000)
• Income Support
• Others listed on Ofgem’s site

Must your home have an EPC rating D to G. Already sitting at C? You won’t qualify—your property’s “too efficient” by their definition.

Jointly owned homes qualify if all owners consent and the household meets income criteria.

Myth to destroy: “I rent, so I can’t get grants.” Wrong. You can access BUS or ECO4 with landlord approval. Most landlords agree that once they realise the grant covers installation costs they’d otherwise dodge.

What Grants Actually Cover (And What They Don’t)

Let’s talk real numbers. Because “up to £7,500” means nothing without context.

BUS: Partial Coverage for Most Systems

Air-to-air heat pumps (the cheap ones)? BUS might cover 100% at £5,000-£7,000 total cost.

Air-to-water systems (what most installers recommend)? You’ll pay £900 to £6,550 out of pocket after the grant. Average install: £10,000. Grant: £7,500. You pay: £2,500.

Ground source heat pumps? Forget it. These run £20,000 to £30,000. BUS covers maybe 30-40% of the bill. You’re financing the rest.

ECO4: Full Funding for the Right Households

If you qualify, ECO4 funds:

• Heat pump installation (100%)
• Insulation upgrades (loft, cavity, solid wall)
• Ventilation improvements
• Controls and thermostats

No out-of-pocket costs if you meet criteria. The installer bills the energy supplier directly.

Stack them? Yes. Some households combine BUS with local authority top-ups or 0% VAT (available until March 2027). Maximum combined savings: £10,000+.

How to Apply Without Losing Your Mind

The process isn’t complex. It’s just bureaucratic.

Step 1: Check Eligibility

Run the numbers at Ofgem’s BUS portal (search “Boiler Upgrade Scheme eligibility”). Takes three minutes.

For ECO4, contact an approved installer who’ll verify your benefits status. Don’t start with your energy supplier—they’ll redirect you anyway.

Step 2: Get Your EPC

Properties need a current Energy Performance Certificate (under 10 years old). Don’t have one? Book an assessment. Costs £60-£120. Takes an hour.

Step 3: Request Installer Quotes

Only use MCS-certified installers. The grant won’t process otherwise. Get three quotes if possible—prices vary wildly between £8,000 and £14,000 for identical systems.

Step 4: Submit Application

Your installer handles this. They’ll upload:

• EPC certificate
• Proof of property ownership (title deed or mortgage statement)
• Benefits evidence (for ECO4)
• System quote and specs

BUS approvals take 2-5 business days. ECO4 takes longer—sometimes weeks—because energy suppliers verify eligibility.

Step 5: Installation and Grant Claim

Installer fits the system. You pay the post-grant balance. Installer claims the voucher from Ofgem or the energy supplier. Everyone’s happy.

Timeline? Application to installation: 4-8 weeks typically. Book early—installers are slammed March-September.

What You Actually Save

Let’s be blunt: heat pumps aren’t cheap to run if you don’t understand tariffs.

Running Costs vs. Gas Boilers

Heat pumps cost 20-50% less annually than gas boilers if you’re on the right electricity tariff. Standard variable rate? You’ll save nothing—possibly pay more.

Switch to Economy 7, Octopus Cosy, or similar heat pump tariffs. Off-peak rates drop to 8-12p/kWh. Suddenly your £1,200 annual heating bill becomes £600-£900.

Payback Period

Without grants: 15-20 years (terrible).
With BUS grant: 5-8 years (acceptable).
With ECO4 full funding: Immediate (obviously).

SCOP matters. A seasonal coefficient of Performance above 2.8 means you’re getting 280% efficiency. Below that? You’ve overpaid for an underperforming system.

Environmental Impact

Heat pumps cut carbon emissions by 80% vs. gas boilers. If you care, great. If you don’t, the financial case stands alone.

The Bottom Line

The Warm Homes Plan drops in March 2026 with £15 billion backing. Same £7,500 grants. New 0% interest loans up to £15,000 for heat pumps and insulation.

As homeowners look for the Best Air Source Heat Pumps to maximize these incentives, the government has set an ambitious target of upgrading 5 million homes by 2030. The plan prioritizes a “fabric-first” approach combined with solar energy and heat pumps to tackle fuel poverty.

Grants are expanding, not disappearing. If you’re waiting for better deals, you’ll wait forever. Current schemes are the best you’ll see.