Heat pump installations rose 24 per cent month-on-month after the government increased the Boiler Upgrade Scheme grant, BusinessGreen reports. The London School of Economics also covered the rise, noting the scheme’s role in accelerating uptake. For a homeowner weighing a replacement boiler, the numbers now tilt more clearly towards a heat pump.
What the grant actually pays for
The Boiler Upgrade Scheme offers £7,500 towards an air-source heat pump and £5,000 towards a ground-source model in England and Wales. That is a substantial chunk of a typical £10,000–£14,000 air-source installation, leaving a net cost of roughly £2,500–£6,500 before any additional insulation or radiator upgrades. BusinessGreen’s reporting suggests the increased grant was the direct trigger for the 24 per cent monthly rise, evidence that upfront cost, not technology scepticism, remains the main barrier.
For a typical three-bed semi off the gas grid, the arithmetic is starker. Replacing an oil boiler with a heat pump can cut heating bills by £300–£500 a year at current prices, on top of the grant. On mains gas, the saving is smaller, often £50–£150 a year, but the grant still shortens the payback period to under a decade for many households.
Why the scheme is not reaching everyone
The grant is only available through MCS-certified installers, and demand for those has outstripped supply in some regions. Homeowners in rural areas report waiting lists of three to six months. The LSE coverage points to the scheme’s design as both its strength and its limit: it is demand-led, so the funding pot can run dry before the financial year ends.
There is also the EPC requirement. To qualify, a property needs a valid Energy Performance Certificate with no outstanding loft or cavity wall insulation recommendations. That rules out many older homes until basic fabric upgrades are completed, work that the Great British Insulation Scheme and ECO4 can part-fund, but which adds time and paperwork.
What it means for your EPC and mortgage
A heat pump installation typically lifts an EPC rating by one or two bands, from D to C or C to B, depending on the starting point and the accompanying insulation. That matters for two reasons. First, lenders increasingly offer green mortgages with lower rates for properties rated C or above. Second, the government’s proposed minimum EPC standard for rented homes, band C by 2028, is already shaping landlord decisions, and owner-occupiers are following.
The grant does not cover the cost of upgrading radiators or pipework, which can add £1,500–£3,000 to a whole-house retrofit. Homeowners should budget for that alongside the heat pump itself. A full assessment from an MCS installer will identify whether existing radiators can handle the lower flow temperatures a heat pump runs at, typically 45–55°C rather than 70–80°C for a gas boiler.
The catch in the 24 per cent figure
Monthly installation numbers are volatile. A 24 per cent rise from a low base can look dramatic without representing a permanent shift. Both BusinessGreen and LSE report the figure without adjusting for seasonality, heat pump installations typically dip in winter and rise in spring, so a single month’s data should be treated with caution.
The bigger question is whether the grant increase is sustainable. The Boiler Upgrade Scheme has a fixed budget, and the higher grant means fewer installations per pound of funding. If demand continues at the current pace, the scheme could exhaust its allocation earlier than planned, leaving homeowners who apply late facing a wait until the next financial year. Officials have not confirmed whether the grant level will be maintained beyond the current period.
Next steps for homeowners
Check your EPC first, if it is below band D or has outstanding insulation recommendations, address those before applying. Then request quotes from at least three MCS-certified installers; the grant is applied by the installer on your behalf, so you do not need to apply separately. Applications are processed first-come, first-served, so move quickly if you are ready.
Homeowners on low incomes should also check eligibility for the Home Upgrade Grant (HUG2) and ECO4, which can cover insulation and heating upgrades at no cost. The Boiler Upgrade Scheme grant is not means-tested, but it cannot be combined with HUG2 funding for the same measure. For a typical three-bed semi, the full package, heat pump, radiator upgrades and loft insulation, can now be delivered for £4,000–£8,000 net, with running costs 10–20 per cent lower than an ageing gas boiler.
Frequently Asked Questions
The grant is £7,500 for an air-source heat pump and £5,000 for a ground-source heat pump in England and Wales. It is paid directly to your MCS-certified installer and deducted from your quote.
Yes. Your property must have a valid Energy Performance Certificate with no outstanding loft or cavity wall insulation recommendations. If your EPC is out of date or lists insulation work, complete that first, ECO4 or the Great British Insulation Scheme may help fund it.
For an off-gas-grid home replacing oil or LPG, savings are typically £300–£500 a year. On mains gas, savings are smaller, around £50–£150 a year, but the grant shortens payback. Running costs depend on your home's insulation and the heat pump's efficiency.
