Heat pump grant rises to £7,500, government confirms
The UK government has confirmed that the Boiler Upgrade Scheme (BUS) grant for heat pumps will increase from £7,000 to £7,500, effective from June 2026. The change was announced in a statement covered by Teesside Live and Chronicle Live. The £500 increase is a 7.1% uplift on the previous grant level, which had been £7,000 since the scheme’s launch in 2022.
The grant applies to both air-source and ground-source heat pumps installed in homes in England and Wales. It is part of the government’s broader push to decarbonise home heating, with a target of 600,000 heat pump installations per year by 2028.
Why the increase matters for your wallet
For a typical 3-bed semi-detached house, a heat pump installation costs between £8,000 and £15,000, depending on the property size, insulation levels, and existing heating system. The new £7,500 grant covers a larger share of that cost, reducing the homeowner’s outlay to as little as £500 in the cheapest scenarios, but more commonly £2,000 to £7,500.
Running costs also factor in. A heat pump can cut heating bills by 20-30% compared to a gas boiler, according to Energy Saving Trust estimates. However, the savings depend on the property’s energy efficiency, a well-insulated home with an EPC rating of C or above will see the biggest gains. Homes with poor insulation may see higher running costs, as heat pumps work best when heat loss is minimised.
Who qualifies, and who doesn’t
Eligibility for the BUS grant requires that your property has a valid Energy Performance Certificate (EPC) with no outstanding recommendations for cavity wall or loft insulation. If your EPC suggests these measures, you must install them before applying for the heat pump grant. This rule is built to ensure the heat pump operates efficiently.
The grant is available to homeowners and self-builders in England and Wales. Landlords are not eligible under the current scheme. Applications are made through MCS-certified installers, who apply on your behalf. The installer deducts the grant from the final bill, so you pay the reduced price directly.
But there is a catch: the scheme has a fixed budget per financial year. Once the funding is exhausted, new applications are paused until the next year. In previous years, the scheme has run out of funding by late autumn, so early application is critical.
What it means for your EPC and home value
Installing a heat pump can improve your EPC rating, particularly if you are replacing an old gas boiler or electric storage heaters. A higher EPC rating can increase your home’s market value by 1-5%, according to Nationwide Building Society research. It also makes your property more attractive to buyers who are mindful of future energy costs and regulatory changes.
The Minimum Energy Efficiency Standards (MEES) currently require rental properties to have an EPC rating of E or above, but this is expected to rise to C by 2030. Heat pumps are one of the few technologies that can help landlords meet that target, though the BUS grant is not available to them directly.
Next steps for homeowners
- Check your EPC rating and ensure any insulation recommendations are addressed. You can find your EPC on the gov.uk website.
- Contact MCS-certified installers for quotes. Use the MCS website to find local installers.
- Apply for the grant as soon as possible after June 2026. The installer will handle the paperwork.
- Consider combining the grant with other schemes, such as ECO4 or the Home Upgrade Grant (HUG2), if you qualify for low-income support.
Frequently Asked Questions
After the grant, a typical heat pump installation costs between £500 and £7,500, depending on the system size and property. The grant covers most of the cost for smaller properties, but larger homes with complex installations may still see significant outlay.
You can still apply, but your EPC must not have outstanding recommendations for cavity wall or loft insulation. If it does, you must install those measures first. A low EPC rating may also mean your property is not suitable for a heat pump without upgrades.
The increase takes effect from June 2026. Applications submitted before that date will receive the previous £7,000 grant. The change was confirmed by the government in early June 2026.
