Heat pumps and solar for new homes: what it means for you

The number 1.5 million is the government’s target for new heat pump installations per year by 2028. That ambition just got a concrete boost: from 2025, every new home built in England will be required to have a heat pump and rooftop solar panels. The Department for Levelling Up, Housing and Communities confirmed the change to building regulations last week, as reported by BBC News.

Who qualifies, and who doesn’t

The new rule applies only to new homes, not existing properties. That means the 29 million existing UK homes, the vast majority of the housing stock, are untouched by this regulation. For homeowners, the message is: your boiler is safe for now, but the direction of travel is clear. The government’s Boiler Upgrade Scheme already offers £7,500 grants for heat pump installation in existing homes, though take-up has been slow. Energy Saving Trust data suggests only about 50,000 heat pumps were installed in the UK last year, compared to 1.5 million gas boilers.

The catch is cost. A heat pump for an existing home typically costs £10,000 to £15,000 installed, even after the grant. For a new-build, the cost is lower, developers can integrate the system during construction, but the upfront price is still passed on to buyers. The Home Builders Federation has warned that the rule could add £4,000 to £6,000 to the price of a new home. That is a real number for first-time buyers already struggling with mortgage rates above 5%.

What it costs a typical 3-bed semi

Ofgem’s latest price cap data puts the average annual heating bill for a gas-heated 3-bed semi at around £1,100. A heat pump in a well-insulated new home could cut that to roughly £700, a saving of £400 a year. But the saving depends on the property’s insulation and the homeowner’s energy tariff. The government’s own impact assessment acknowledges that heat pumps can be less efficient in older, draughty homes, which is why the rule targets new builds.

Solar panels add another layer. A typical 3.5 kW system on a new home can generate about 2,800 kWh per year, covering roughly 30% of an average household’s electricity demand. At current electricity rates of 24p per kWh, that saves about £670 a year. The combined heat-pump-plus-solar package could reduce a new home’s total energy bill by over £1,000 annually, according to government modelling.

But what about the grid?

Yet the policy raises a question that ministers have not fully answered: can the grid handle millions of heat pumps and solar panels? National Grid’s Future Energy Scenarios suggest that peak electricity demand could rise by 50% by 2035 if heat pumps and electric vehicles are widely adopted. That means network upgrades, which Ofgem says could cost £40 billion by 2030, are inevitable. Those costs will ultimately appear on household bills through network charges, which already account for about 20% of the average electricity bill.

What this misses is the retrofit elephant in the room. The UK has the oldest housing stock in Europe, with 60% of homes built before 1980. Insulating them to the level needed for efficient heat pump operation would cost £10,000 to £20,000 per home, according to the Climate Change Committee. The government’s current retrofit programmes, the Social Housing Decarbonisation Fund and the Home Upgrade Grant, cover only a fraction of that need.

For homeowners reading this, the practical takeaway is straightforward: if you are building a new home, the rule means your house will come with a heat pump and solar panels. If you are renovating an existing home, the Boiler Upgrade Scheme is your best bet for a subsidised switch. The Energy Saving Trust recommends checking your home’s insulation before installing a heat pump, cavity wall and loft insulation are essential for efficiency. Applications for the Boiler Upgrade Scheme can be made through Ofgem’s website, but you must act before your installer starts work. The scheme is first-come, first-served and funding is limited.