Heat pump grants now cover air conditioning too

The price cap is set to rise again in October, adding roughly £63 to the average household bill. For millions of UK homeowners, every kilowatt-hour counts. Against that backdrop, the government has quietly widened the £2,500 Boiler Upgrade Scheme to include air-to-air heat pumps, the same technology that powers most air conditioning units.

As reported by The i Paper, the change means homeowners can now claim the grant for systems that both cool and heat their homes. The catch is that the unit must be classified as a heat pump, not a standalone air conditioner, and must replace an existing fossil fuel boiler.

Who qualifies, and who doesn’t

Eligibility is tighter than the headline suggests. The property must have a valid Energy Performance Certificate with no outstanding recommendations for loft or cavity wall insulation. The existing heating system must be powered by oil, gas, or electric storage heaters. And the new air-to-air heat pump must have a Seasonal Coefficient of Performance of at least 3.0, a standard that most modern reversible air conditioners meet.

Ofgem, which administers the scheme, confirmed to industry bodies last month that the criteria apply equally to air-to-air and air-to-water systems. The grant covers installation costs up to £2,500, but does not include any additional electrical work or structural alterations. Homeowners in Scotland can also apply through the separate Home Energy Scotland scheme, which offers up to £7,500.

What it costs a typical 3-bed semi

Installing a multi-split air-to-air heat pump in a three-bedroom semi-detached house typically costs between £4,000 and £7,000, according to estimates from the Energy Saving Trust. After the £2,500 grant, the homeowner pays £1,500 to £4,500. Running costs vary: heating a home with an air-to-air system can be 20–30% cheaper than electric storage heaters, but may be slightly more expensive than a modern gas boiler depending on electricity tariffs.

The cooling benefit is harder to price. With summer temperatures regularly exceeding 30°C in parts of southern England, the ability to cool a bedroom or living room without installing a separate unit is a genuine advantage. The system also adds value to an EPC: an air-to-air heat pump can improve a D-rated property to a C, provided the rest of the building fabric is adequate.

But, and this is the key caveat, the grant does not cover the cost of upgrading your electrics. Many older homes need a new consumer unit or dedicated circuit for the heat pump, which can add £500–£1,000. The Energy Saving Trust recommends budgeting for this upfront.

How to apply, and what to watch out for

Applications must be made through a registered installer, not directly by the homeowner. The installer submits the grant claim to Ofgem after the system is commissioned. The homeowner pays the installer the full cost minus the grant, and the installer reclaims the £2,500 from the scheme.

The scheme is capped at 50,000 grants per year across the UK, with a total budget of £125 million. In the first year, fewer than 20,000 grants were issued, but demand is rising. Homeowners should check that their chosen installer is on the Microgeneration Certification Scheme (MCS) list, otherwise, the grant is invalid.

Timing matters: the application window for 2025 grants opens in January, and funds are allocated on a first-come, first-served basis. Installers in high-demand areas, London, the South East, and the Midlands, are already booking into March 2025.

One scene-setter

In a recent case in Brighton, a homeowner replaced an old gas boiler with a three-room air-to-air system. The upfront cost was £5,800. After the £2,500 grant, they paid £3,300. Their annual heating bill dropped from £1,100 to £680, and they now cool the bedrooms during summer heatwaves. The system added 12 points to their EPC, moving them from a D to a C.

That is the kind of real-world outcome the scheme was designed for. But the government has not yet published data on how many air-to-air installations have been funded. The official figures, due in November, will show whether the grant is reaching the households that need it most, or merely subsidising luxury cooling for those who could afford it anyway.

Households on standard variable tariffs can check eligibility through the Ofgem website now. The installer search tool on the MCS website lists accredited fitters by postcode. Applications open on 2 January 2025. The scheme runs until 31 March 2027, or until the budget is exhausted, whichever comes first.