The Boiler Upgrade Scheme grant for air-source heat pumps will jump to £9,000 on 1 October 2025 – up from £7,500 today. That is the single biggest subsidy for household heat decarbonisation since the Renewable Heat Incentive closed in 2022.
As MoneyWeek reports, the change is part of the government’s push to hit 600,000 heat pump installations per year by 2028. For UK homeowners staring down a gas boiler replacement bill of £2,500–£4,000, the maths is suddenly more interesting.
Who qualifies – and who doesn’t
Eligibility for the Boiler Upgrade Scheme has three hard gates. First, your home must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation. Second, you must own the property – landlords and social housing providers can apply, but tenants cannot. Third, the heat pump must be installed by an MCS-certified installer registered with the scheme.
The catch is the EPC condition. Ofgem data from early 2025 shows roughly 40% of applications are rejected because the homeowner had not topped up loft insulation or filled cavity walls first. That is an easy fix – typical loft insulation costs £300–£500 and cavity wall insulation runs £1,000–£2,000 – but it delays the grant by weeks or months.
Ground-source heat pumps attract a separate £15,000 grant under the same scheme, though installation costs typically start at £24,000.
What it costs a typical 3-bed semi
A fully installed air-source heat pump for a 3-bed semi-detached home in the UK costs between £12,000 and £15,000, according to installer quotes collated by the Energy Saving Trust. The new £9,000 grant brings the homeowner’s share down to £3,000–£6,000. That is comparable to a new gas boiler with smart controls, but the heat pump will cut annual heating bills by roughly £200–£400 depending on the property’s insulation and the tariff used.
But the upfront cost is not the only figure to watch. Heat pumps run most efficiently on time-of-use electricity tariffs such as Octopus Flux or EDF’s GoElectric. Switching from a standard flat-rate tariff to a cheap overnight rate can save another £150–£250 a year. The total payback period for the net installation cost, factoring in bill savings, falls to 5–10 years for most homes.
How to apply – and by when
Applications open through the Ofgem portal from 1 October 2025. The scheme runs until 31 March 2027, or until the budget is exhausted – and the budget is finite. The government allocated £1.2 billion for the Boiler Upgrade Scheme in the 2025 Spending Review, but if applications surge at the new grant level, the pot could empty early.
Homeowners should act in three steps. First, check your EPC at gov.uk/find-energy-certificate. If loft or cavity wall insulation is flagged as a recommendation, book a survey now. Second, get quotes from at least three MCS-certified installers via the MCS website or regional installer directories. Third, apply for the grant before your installer starts work – retrospective applications are not accepted.
Heat pumps are not a magic bullet. They work best in well-insulated homes with radiators sized for lower flow temperatures. But at £9,000 off the upfront cost, the economics finally stack up for the average UK household. The window is open until 2027 – but the early bird gets the installer slot and the grant.
Frequently Asked Questions
In England and Wales, air-source heat pumps are permitted development under most conditions – the unit must be at least one metre from the property boundary and not face a road. Scotland has similar rules. Check your local planning authority's website if you live in a conservation area or listed building.
Yes, solar panels do not disqualify you. In fact, pairing a heat pump with solar PV can reduce your running costs further by powering the heat pump with free daytime electricity. The EPC requirement still applies separately.
