The £2,500 Cooling Grant That Isn’t What You Think

The Boiler Upgrade Scheme offers £2,500 towards a heat pump, a device that can cool your home as well as heat it. But that headline figure, as reported by MoneyMagpie, conceals a more complicated reality for UK homeowners.

What the grant actually covers

The £2,500 comes from the Boiler Upgrade Scheme, run by Ofgem since May 2022. It covers air-source heat pumps, ground-source heat pumps, and biomass boilers, not portable air conditioning units or split-system coolers. Heat pumps work in reverse during summer, extracting heat from inside your home and expelling it outside. That means they can cool a house, but only if you install a system designed for both functions. Most air-source heat pumps sold in the UK now include a reversing valve, so cooling is standard. The catch: installation costs typically run between £7,000 and £13,000 after the grant, according to Energy Saving Trust estimates. For a typical 3-bed semi with 12,000 kWh annual heating demand, the net cost after grant is around £6,000 to £10,500.

Who qualifies, and who doesn’t

Eligibility is narrower than many expect. You must own your home (private tenants are excluded, though landlords can apply for rental properties). Your property must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation, the government wants homes efficient before adding a heat pump. Off-gas-grid homes get priority, but on-grid properties are also eligible. The scheme runs until March 2027, with a cap of 90,000 installations per year. As of mid-2024, uptake has been slower than expected, about 30,000 grants issued, per Ofgem data, partly because installers are scarce and partly because upfront costs remain high even after the grant.

What it costs a typical 3-bed semi

Let’s run the numbers. A heat pump for a 3-bed semi costs £9,000 to £15,000 installed (including outdoor unit, indoor hydrobox, hot water cylinder, and pipework). The £2,500 grant brings that to £6,500 to £12,500. Annual running costs for heating and hot water: roughly £800 to £1,200 at current electricity prices (28p/kWh), versus £1,200 to £1,800 for a gas boiler at 7p/kWh. Cooling adds maybe £100-£200 in summer electricity use. Payback period depends on your current fuel: if replacing oil or LPG, payback is 5-8 years; if replacing gas, it can be 12-18 years. The EPC impact is real: a heat pump can lift a D-rated property to C or even B, adding 5-10% to property value, according to Nationwide’s 2023 research.

The cooling reality check

But here’s the rub: heat pumps cool less aggressively than dedicated air conditioning. They lower indoor temperature by 3-5°C below outside, not the 8-10°C drop a split-system AC can achieve. In a UK summer where 30°C days are becoming common, that may be enough, but don’t expect arctic chill. You’ll also need underfloor heating or larger radiators for efficient heating in winter; existing radiators may need upgrading, adding £2,000-£4,000. And the outdoor unit must sit on a concrete base at least 1 metre from windows and boundaries, not always possible in terraced homes or small gardens. Planning permission is not usually required, but permitted development rules apply.

What to do next

If you’re serious about cooling and heating with one system, start by checking your EPC on gov.uk. If it’s D or below, invest in loft and wall insulation first, a heat pump on a leaky home wastes money. Then get quotes from at least three MCS-certified installers (find them via the Microgeneration Certification Scheme website). The grant application is handled by the installer, not you, so ask upfront if they’re registered for the Boiler Upgrade Scheme. Apply before March 2027 to lock in the £2,500. And if you only want cooling for a single room, forget the heat pump: a portable AC unit costs £300-£600 and plugs into a wall socket. The grant is for whole-home solutions, not spot cooling.