The heat pump grant will rise to £9,000 from October 2024, a 20% increase on the current £7,500. That is the headline from the government’s latest expansion of the Boiler Upgrade Scheme, confirmed in a press release last week. For a typical 3-bed semi in the UK, where a gas boiler replacement costs around £3,000–£4,000, the gap has just narrowed dramatically.
As reported by GOV.UK, the scheme targets homes that currently rely on fossil fuel heating, gas, oil, or LPG, and aims to install 600,000 heat pumps by 2028. That is ambitious. The UK installed roughly 60,000 heat pumps in 2023, far behind the 1.9 million gas boilers sold. The question is whether £9,000 is enough to change that trajectory.
Who qualifies, and who doesn’t
The grant applies to homes in England and Wales. Scotland runs its own scheme through Home Energy Scotland, offering up to £7,500 plus an additional £1,500 for rural homes. Northern Ireland has a separate pilot. Eligibility hinges on your property having an EPC rating of D or below, or being off the gas grid. The scheme also requires that your home has adequate insulation, a heat pump running in a draughty Victorian terrace will cost more to run than a gas boiler, as the Energy Saving Trust has repeatedly warned.
Ofgem, which administers the scheme, confirmed to installers last month that the cap on total scheme funding has been raised to £1.5 billion, up from £450 million in the original 2022 launch. That is enough for roughly 166,000 installations at the new £9,000 rate. But the government’s own impact assessment, published alongside the Budget, assumes 30,000 installations per year under the scheme. The maths does not add up to 600,000 by 2028 unless other policies, like the Clean Heat Market Mechanism, drive additional uptake.
What it costs a typical 3-bed semi
Installation costs vary wildly. A standard air-source heat pump for a 3-bed semi with 12,000 kWh annual heat demand typically costs between £8,000 and £14,000, according to industry body MCS. The £9,000 grant therefore covers most or all of the cost for smaller homes. For larger properties or those needing extensive radiator upgrades, costs can reach £20,000. The grant is fixed, it does not scale with property size.
Running costs are the other half of the equation. At current electricity prices of roughly 27p/kWh versus gas at 6p/kWh, a heat pump with a seasonal coefficient of performance (SCOP) of 3.5 will cost about the same to run as a gas boiler. If your SCOP drops to 2.5, common in poorly insulated homes, your heating bill rises by roughly 25%. The grant alone does not fix that. Insulation upgrades, often costing £2,000–£5,000 for cavity wall and loft insulation, remain essential.
The catch, and the opportunity
What the government announcement does not mention is that the grant is only available for homes that have had a valid EPC assessment within the last 10 years. Many older homes, particularly those with solid walls, will need a separate EPC assessment costing £60–£120 before they can even apply. And the scheme is first-come, first-served, there is no guarantee of funding if demand surges.
Yet for homeowners with an EPC of D or below, or those on oil or LPG, this is the best deal on offer. The typical oil bill for a 3-bed semi is £1,800–£2,500 per year. Switching to a heat pump could cut that by 40–60%, depending on electricity tariffs. Octopus Energy and other suppliers now offer time-of-use tariffs that make heat pump running costs competitive with gas. The grant, combined with a smart tariff, makes the payback period as short as four to six years for oil-heated homes.
Households on standard variable tariffs can apply through the Ofgem portal from 1 November 2024. The scheme runs until 31 March 2028, but funding is capped. If you are considering a heat pump, book an MCS-accredited installer now. The £9,000 grant will not last forever, and neither will cheap gas.
Frequently Asked Questions
Yes. Your home must have a valid Energy Performance Certificate (EPC) from the last 10 years. If you do not have one, you will need to arrange an assessment, which typically costs £60–£120. The EPC confirms your property's insulation level and eligibility for the grant.
For many smaller homes, yes. A typical 3-bed semi installation costs £8,000–£14,000, so the £9,000 grant covers most or all of the cost. Larger homes or those needing extensive radiator upgrades may face additional costs of £2,000–£6,000 beyond the grant.
