Ofgem’s Boiler Upgrade Scheme handed out £7,500 per heat pump to 20,000 households in 2024 — but nearly 40 per cent of applicants were rejected on first try, often because their home’s energy efficiency fell short. That figure, buried in a parliamentary answer last October, is the real story behind the small business energy grants now making headlines.
As reported by Small Business UK, the government’s small business energy grants cover heat pumps, solar panels, and insulation — the exact same technologies that drive domestic EPC ratings. The difference is that businesses can often stack multiple grants from different pots, while homeowners typically get one shot.
Who qualifies — and who doesn’t
The small business grants target firms with fewer than 250 employees and an annual turnover under £44 million. They require an energy audit first, then fund up to 50 per cent of eligible costs. For a small bakery installing a 12 kW heat pump, that could mean £6,000 off a £12,000 installation — similar to the Boiler Upgrade Scheme’s £7,500 for homeowners.
But the catch is eligibility. Business grants often demand a minimum EPC rating of D, mirroring the domestic requirement for the Home Upgrade Grant. If your home is EPC F or G — about 3.5 million UK properties — you cannot access most heat pump grants until you insulate first. The Energy Saving Trust estimates cavity wall insulation costs £2,400–£4,800 for a typical 3-bed semi, and loft insulation £300–£700. Without that, a heat pump will run inefficiently and your application will fail.
What it costs a typical 3-bed semi
A standard 3-bed semi using 12,000 kWh of gas and 3,000 kWh of electricity per year pays about £1,800 under the January 2025 price cap. Switching to a heat pump could cut heating costs by 20–30 per cent, but only if the house is well insulated. The Boiler Upgrade Scheme covers £7,500 of the heat pump cost, typically leaving the homeowner to find £2,000–£5,000 for the rest, plus insulation costs.
Small business grants often cover 50 per cent of insulation costs too — a model the government should extend to households. The Home Upgrade Grant does this for low-income homes, but 80 per cent of UK homes are ineligible. The result: a two-tier system where businesses can wrap funding around multiple upgrades, but most homeowners must pay for fabric improvements out of pocket before they can claim heat pump money.
The deadline trap
Business energy grants usually have 12-month application windows. The Boiler Upgrade Scheme runs until 2028, but the pot is capped at 50,000 installations per year. Once it’s gone, it’s gone — 2024’s allocation was fully claimed by October.
Homeowners should treat every grant as a limited-time offer. The Smart Export Guarantee pays for solar electricity exported to the grid, but rates have fallen from 15p/kWh to 5p/kWh in some regions. The Green Homes Grant was scrapped after nine months. If you see a scheme, apply within the first quarter of its launch.
What you can do now
First, get an EPC assessment. A rating of D or above unlocks most grants. Second, check the Energy Saving Trust’s grant database for local authority top-ups — some councils offer £1,000 extra for heat pumps on top of the national scheme. Third, book a heat pump installer through MCS-certified firms listed on gov.uk. The Boiler Upgrade Scheme closes to new applications on 31 March 2027, or earlier if the budget runs out. Households on standard variable tariffs can apply through gov.uk from 1 April 2025. Eligibility closes when the money does — so move before the queue forms.
Frequently Asked Questions
No. The Boiler Upgrade Scheme is for domestic properties only. Small business grants are separate and cannot be stacked with domestic schemes. However, you can apply for local authority top-ups on top of the Boiler Upgrade Scheme if your council offers them.
Yes. The Boiler Upgrade Scheme requires an EPC rating of D or better, or evidence that insulation improvements have been made. Without it, your application will be rejected. An EPC costs £60–£120 and takes about an hour.
