The number of heat pumps sold in the UK fell in the first three months of 2025, the first quarterly decline since the government raised the Boiler Upgrade Scheme grant to £7,500. That is a problem for ministers who want 600,000 heat pumps installed each year by 2028. The current run rate is below 60,000.
As reported by Cooling Post, industry data from the Heat Pump Association shows 43,000 units sold in Q1, down from 46,000 in the same period last year. The drop is small in absolute terms but significant in direction, sales had been rising steadily since 2022.
Why sales are stalling
The headline reason is cost. A typical air-source heat pump installation runs between £7,000 and £13,000, according to the Energy Saving Trust. Even after the £7,500 grant, a homeowner can still face a net cost of £2,000 to £5,500. A new gas boiler costs £1,500 to £3,000 with no grant. The maths does not work for most households on a simple payback basis, especially with gas prices capped at roughly 6p per kWh versus electricity at 24p per kWh.
The second barrier is installer capacity. The UK has roughly 4,000 MCS-certified heat pump installers. To hit the 600,000 target, the industry needs at least 30,000. That is a training pipeline problem that no grant alone can fix.
But the third reason is the one ministers rarely discuss: EPC confusion. Many homeowners believe their property is unsuitable, too old, too draughty, too small a garden. The reality is that most homes can take a heat pump if the fabric is improved first. But insulation and draught-proofing add another £2,000 to £8,000 to the bill, and the grant does not cover that.
What this means for your EPC and bills
A well-installed heat pump can lift a home’s EPC rating from D to C, or from C to B, according to government modelling. That matters because from 2035, landlords cannot rent out properties with an EPC below C. Owner-occupiers benefit too: a B-rated home uses roughly 40% less energy than a D-rated one, cutting annual heating bills by £400 to £700 at current prices.
The catch is that those savings are only realised if the heat pump is sized correctly and the home is well insulated. A poorly designed system can cost more to run than a gas boiler. Ofgem data from the Heat Pump Monitor shows that typical annual running costs for a heat pump in a 3-bed semi are £850 to £1,100, versus £650 to £800 for gas. The gap narrows if you have solar panels or a time-of-use tariff like Octopus Flux.
Who qualifies, and who doesn’t
The Boiler Upgrade Scheme is open to homeowners in England and Wales. You need a valid EPC with no outstanding recommendations for loft or cavity wall insulation. The grant is deducted from the installer’s quote, you do not claim it yourself. Applications are processed by Ofgem and typically take four to six weeks.
Scotland has its own scheme, Home Energy Scotland, which offers up to £7,500 plus an additional £1,500 for households on certain benefits. Northern Ireland is covered by the NI Energy Advice Service, though grant levels are lower.
The key exclusion: if you are on a standard variable electricity tariff with no heat-pump-specific rate, you will pay more per kWh. The government has promised to rebalance electricity and gas levies, but that reform is not expected until 2026 at the earliest.
What homeowners should do now
Do not wait for the perfect policy. If your gas boiler is over 15 years old, start planning a heat pump replacement now. Get three quotes from MCS-certified installers. Check your EPC and fix the cheap insulation first, loft top-up costs about £500 and pays back in two years. Apply for the Boiler Upgrade Scheme before the budget in October, when the grant may be cut or eligibility tightened.
The Q1 sales dip is a warning, not a verdict. Heat pumps work, they cut carbon, and they will eventually be cheaper to run than gas. But the transition will not happen on a government spreadsheet. It will happen one home at a time, and only when the upfront cost feels like an investment, not a gamble.
Frequently Asked Questions
Not always. At current energy prices, a heat pump in a typical 3-bed semi costs £850–£1,100 per year to run, compared to £650–£800 for gas. The gap narrows with solar panels, a heat-pump tariff, or a well-insulated home. The government plans to rebalance electricity and gas levies by 2026, which should make heat pumps cheaper to run.
Yes, but you must have loft and cavity wall insulation up to standard. The Boiler Upgrade Scheme requires an EPC with no outstanding recommendations for those measures. If your EPC is below C, you may need to insulate first, which costs £2,000–£8,000 but will also improve your energy rating and cut bills.
