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Heat pump grants – Your key questions answered

From April 2022, homeowners in England and Wales will be offered subsidies to replace their oil & gas central heating boilers with low-carbon heat pumps. 

This comes after the UK Government said it wants no new gas boilers to be sold after 2035 – although they haven’t yet put a blanket ban on their sales. 

There are around 25-30 million homes in the UK that are heated by gas boilers, but the latest government incentive will only fund around 90,000 replacements. 

So, we’re asking, does this latest “green heating” incentive go far enough? 

And who is eligible for the change? 

We answer some of the key questions about UK Heat Pump Grants and give you the low down on the Boiler Upgrade Scheme.

What is an air source heat pump?

An air source heat pump looks very much like an air conditioning unit, but operates in the opposite way. 

Placed outside your home, an air source heat pump uses electricity to take energy from the air outside and converts that air into heat. 

These clever bits of kit can even heat your home when the weather outside is really cold.

Two residential modern heat pumps buried in snow

Air and ground source heat pumps can produce around three-times the amount of energy that they use, which makes them far more environmentally-friendly and efficient than gas boilers.

Unlike gas boilers that will emit pollutants like nitrogen dioxide and other carbon emissions, air source heat pumps are a cleaner alternative.

It is hoped that their installation in UK homes will help us achieve net zero carbon emissions by the middle of the century.

Find out more about air source heat pumps, in our ultimate guide.

Does having a heat pump mean I need a water tank?

With modern gas combi boilers removing the need for big water tanks, it could be argued that needing them again with an air source heat pump is a bit of a step backwards for home heating.

But, as heat pumps supply water at a lower temperature than boiler systems, you will need a tank to be installed to store the water for use later on. 

This tank needs to be really well insulated to prevent heat loss.

a heat pump hot water cylinder
Image by @kinek00

And, unlike standard oil and gas boilers, which store water at around 60-65℃, heat pumps can only achieve around 45℃ – which will mean your tank needs a boost of heat from time to time.

This means, tanks used with heat pumps will very likely contain a heating element. 

The thing is, heat pumps are less effective and efficient at lower temperatures, so it’s important to get it right. 

A water tank with an element that is too small will mean that the hot water doesn’t reach the desired temperature, and one that is too big means paying for something you won’t ever use. 

Just keep in mind that if you do switch to air or ground source heat pumps, you will require a heat tank with a heat exchanger coil, otherwise you’ll not enjoy much heat at all. 

How much will a heat pump cost to run?

Although the initial outlay for a heat pump might (just now, at least) be considerably more than a conventional gas boiler, they are generally much cheaper to run and maintain. 

According to The Energy Savings Trust, heat pumps are one of the most efficient ways to heat your home, which makes them much cheaper to run than more conventional heating systems.

It’s tough to give an exact figure for exactly how much could be saved, though EDF have done a decent job of creating a ballpark.

Minature houses resting on pound coin stacks concept for heat pump costs

They state that a modern four-bedroom home may need around 19,000kWh of heat a year – though this will vary depending on property type.

With a gas cost of 4.6p per kWh, multiplied by 19,000kWh, that would amount to around £874 for 90% efficient gas.

However, if you were to use an air source heat pump and electricity at 16p per kWh, the cost would actually be identical. 

16p/kWh for electricity, divided by the coefficient of performance of 3.5 and multiplied by 19,000kWh results in a fee of around £868 – so not much difference at all! 

Though, if you were to use EDF’s GoElectric cheap electricity tariff – and did half of your heating overnight – you could save 25% (around £220) as it is half the cost of gas for half of the time.

But it is in hot water usage where the savings can increase the most. 

The average 4-person home will use around 160 litres of water a day, and with an air source heat pump powered by cheap electricity you might save around £80 and pay only £65 or so for your hot water. 

Are there alternatives to air source heat pumps?

There are alternatives to air source heat pumps. 

You could consider a Ground Source Heat Pump, Biomass Boiler or a Solar Panelling System, as all will reduce the carbon emissions your home creates. 

Each of these alternatives to gas central heating will help to increase energy efficiency and reduce energy bills.

Check out our (Mostly) Complete Guide To Home Heating Systems to learn more about alternative home heating solutions.

What does the government’s heat pump scheme offer?

The three-year-long Boiler Upgrade Scheme launched in April 2022 with the aim of reducing carbon emissions and cutting the cost of fitting heat pumps to UK homes. 

The plan is to attempt to ensure that low carbon heating systems are no more expensive than gas boiler alternatives, sooner rather than later.

It’s part of the wider £3.9 billion Heat & Buildings Strategy, which aims to improve the efficiency of all UK homes.

That incentive was rubber stamped by the government with the idea of making all of our homes’ heating systems low carbon by 2035.

United Kingdom coat of arms stamp with rubber stamp on craft paper

The government initially offered to pay for 90,000 heat pumps over three years, at a cost of £5,000 a pump, meaning this part of the incentive will be worth around £450m of taxpayer cash. 

However, incentivisation was increased in October 2023, with the offering upped to £7,500 as a starting point towards an air source or ground source heat pump.

This new scheme comes off the back of a similar approach from the government in 2020 called the Green Homes Grant

That gave people an option to apply for a £5,000 grant towards improving heating systems. 

However, it proved incredibly difficult to access and the government closed the scheme for new applicants in March 2021. 

Who is eligible for the new £7,500 heat pump grant scheme?

Hands of businessman stamp on paper document to approve heat pump agreement

Eligibility for the Boiler Upgrade Scheme is detailed on the gov.uk website. It states that you are eligible for a grant if you meet the following criteria:

  • You must own the property you are applying for (whether that be a business premises, a second home, or a property you rent out to tenants)
  • Have had your heating system fitted on or after 1 April 2022
  • Be switching from fossil fuel heating systems, such as gas, oil, electric or LPG (liquefied petroleum gas) to your preferred green heating option

You remain eligible if you have already received funding to make your property more energy efficient, by insulating it, for instance.

How to check if your property is eligible

Again in accordance with gov.uk guidelines, your property needs a valid Energy Performance Certificate (EPC) in the absence of any recommendations for loft or cavity wall insulation.

These eligibility rules for a grant are set to change from early May 2024, however. From there, your property will be eligible even if outstanding insulation recommendations exist on the EPC.

Does the grant cover the full cost of boiler replacement?

No, it doesn’t. 

Heat pumps cost around £10,000 to install (or a lot more if you opt for high end versions), which means that anybody that successfully applies for the grant will have to fork out a few quid to get the job done.

The government insists that the extra money you would have to pay is around the same as the cost of a new gas boiler. 

But even the highest end gas combi boilers cost around £2,500 – before installation costs are factored in – so it’s a little less than the money you’ll need to get a heat pump. 

A rear view of people with placards and posters on global strike for climate change.

However, as part of the decarbonisation of Britain, it is the ambition of this government to drive down the average cost of heat pumps by “between a quarter and a half” by the year 2025.

And, on top of that, the government is aiming to ensure energy firms will be charging the same for air source heat pumps as they do for standard gas boilers, by 2030.

So, by the time the initial grants have come and gone, and everyone is in the market for a heat pump, you may benefit from cheaper initial outlays and lower installation costs.

Will I have to get rid of my gas boiler?

Initially, it was thought that there was a blanket ban on ALL gas and oil powered boilers, but following an outcry over the cost for UK households, this proposed change fell by the wayside.

You don’t have to worry about getting rid of your existing gas or oil fired boiler, as the ban only applies to new-build homes from 2025. 

As yet, there are no plans to phase out gas and oil powered boilers in existing homes.

an old boiler left on the ground

However, there is every chance that the government will use new grants or financial incentives between now and 2025 to get us to consider greener heating alternatives and embrace low-carbon heating systems. 

This sort of approach is already live and kicking with the Renewable Heat Incentive, which gives a quarterly payout to homeowners that purchase renewable heating systems – though that will be closed to new applicants in March 2022

Depending on how well other schemes and decarbonisation efforts perform, it’s feasible that a complete ban on gas boilers could materialise at some point. 

However, we feel it is very unlikely to happen before incentives for better insulation (as asked for by Insulate Britain) come into effect and help to reduce heat loss in the UK’s older homes.

What if I don’t have room for a heat pump?

As you may imagine, not every home in the UK is going to be suitable for a heat pump. 

They require an outside unit to be installed, and a lot of UK houses simply do not have the space to accommodate them. 

There are other alternatives as we’ve alluded to above, but what this means for homes with no space for heat pumps is as yet unclear.

It’s been proposed that “heat networks” – which make use of a central source of excess energy like shopping centres or factories – could heat a few thousand homes.

Glow light of petrochemical industry during sunset

This district heating approach is already in place in some areas, with around half a million UK homes being fed heat from around 14,000 heat networks. 

However, some residents have had mixed experiences with existing district heating schemes and this has led many to question the safety of such practices being rolled out on a larger scale. 

Other alternative options include adding hydrogen to our gas main supply and allowing boilers to run on that fuel instead. 

But, as this proposed change is only in its infancy, we can’t expect a decision on any hydrogen fed boiler schemes until around 2026.

Are there big maintenance costs for air source heat pumps?

Just like with conventional gas boilers, you should look to have your heat pump professionally serviced regularly.

Once or twice every other year is fine, unless you have a compressor installed in your home; in which case, you should get that checked out each year. 

Although they use technology that has been around for a while, there are moving parts that can become damaged over time.

a man replacing a heat pump on the outside of a house

But, most heat pumps should have a working life span of around 20 years and are relatively easy to maintain when compared to boilers.

There are a few things you can do to maintain the pump for free though, like ensuring air can reach the appliance outside. 

This means keeping it free of debris, clearing out leaves that have been caught in the fan grille and clearing any snow or ice that may have blocked the mechanisms.

Typically, you can expect to pay around £150-200 to have an engineer come to look over your heat pump, but the cost will vary from town to town and county to county.

If I move house, can I take my heat pump with me?

Theoretically, we suppose you could do that, if you felt the need to. 

However, when have you taken the boiler from the house when you’ve moved?

Most people will believe that – like with gas boilers – the heat pump comes with the house. 

Also, moving it from one property to another could be more expensive than just buying a new system, and there’s no guarantee the old one will work in the new property either. 

So, if you do plan on moving after installing a heat pump, chances are there’s no point in taking it with you and it’ll be more trouble than it’s worth if you do.

Is having an air source heat pump even worth it?

It is, but there are circumstances that will dictate just how worthwhile it will be. 

If you’re tearing out and restoring a property from scratch and putting in additional insulation, then installing an air source heat pump – or better still, a ground source pump – it makes sense to do so.

Insulation of attic with foam insulation cold barrier and insulation material polyurea Spraying, foam coating

And provided you are adequately insulated, it also makes sense to get rid of a battered old boiler and consider a heat pump instead.

The decision to rip out a perfectly good gas boiler will depend on how eco-minded you are and how keen you are for the nation to get to net zero carbon. 

One thing to keep in mind is your insulation levels, for without adequate insulation, you should be prepared to pay higher heating bills if you switch to a heat pump of some kind. 

Is it better to wait for other alternatives?

Perhaps it is. 

There is a lot of investment going into greener alternatives to heat our homes, but progress is slow and there are a lot of players in the game dictating what is and is not possible. 

As we’ve mentioned, there are district heating schemes that can replace gas boilers, alongside Hydrogen heating ideas in the pipeline too. 

There are trials and efforts being made to find other alternatives alongside these but, for now at least, heat pumps appear to be the way in which the government feels they can make the most headway towards net zero.

What else is the government doing to cut UK emissions? 

Despite some criticism of the approach around heat pumps and how far the money goes to helping those in fuel poverty, the government has been working to lower carbon emissions elsewhere. 

Much of the UK’s grid energy now comes from wind, which is free from carbon, and gas powered power stations are used more than coal as they emit less carbon.

Green eco house environmental background in field for future residential building plot

There is also the pledge to reduce carbon emissions to net zero by 2050 – the point where we take as much climate changing gas from the atmosphere as we as a nation put in. 

They also have a target to ensure all of the UK’s electricity comes from a clean source by 2035 – and a plan to install 600,000 heat pumps a year by 2028. 

There will be a ban on the sale of all petrol and diesel cars in the UK by 2030, and incentives planned for electric car use as well.

So, it’s not like the government aren’t doing a lot already, but how effective and viable new proposals are, remains to be seen.

Frequently Asked Questions

From April 2022 onwards, homeowners in the UK and Wales can claim a £5,000 government grant to help with the cost of air source heat pumps.

As initial air source heat pump installations will typically cost in the region of £10,000 to £10,500, this offsets a significant portion of air source heating costs to begin with.

Our blog, Heat Pump Grants – Your Questions Answered has details on everything you need to know about air source heat pump government grants. Or, you could visit our Ultimate Guide To Air Source Heat Pumps for further insight, or consult air source heat pump advice from the Energy Saving Trust.

There are a multitude of air source heat pumps pros and cons to weigh up before committing to investing in the low-carbon heating solution.

Amongst the pros are the economical, environmentally friendly way in which they operate, delivering an efficient performance with comparatively low running costs against traditional gas boilers.

There’s also a significant financial incentive to opt for an air source heat pump, with £5,000 subsidies available to homeowners in the UK and Wales from April 2022 for their installation.

They are easier to install than alternative green heating options too, so a smaller initial outlay can be expected as well as long-term energy savings for those investing in an air source heating systems.

On the con side of things, air source heat systems can be slightly noisier than other heating options whilst in operation, and in some instances, might be restricted for use, as it relates to heat output, in the form of only certain air source heat pump radiators or underfloor heating, for example.

The expensive initial air source heat pump cost can be considered a con too, though the aforementioned air source heat pump grants can go a long way towards offsetting this negative.

For further information and a more detailed insight into air source heat pumps pros and cons, take a look at our dedicated blogs on the subject – Heat Pumps – Your Questions Answered, and The Ultimate Guide To Air Source Heat Pumps. Or, consult the Energy Saving Trust for further air source heat pump advice.

From October 2023 onwards, homeowners in the UK and Wales will be eligible to receive a £7,500 subsidy when installing an air source heat pump on their property.

This legislation is set to replace the Renewable Heat Incentive (RHI) scheme currently in place, ensuring that those with air source heating systems are eligible to receive financial assistance for their low-carbon heating solutions from the off.

Our blog, Heat Pump Grants – Your Questions Answered offers a more detailed insight into which grants for air source heat pumps are available. You can also find further information in our Ultimate Guide To Air Source Heat Pumps, or seek air source heat pump advice from the Energy Saving Trust.

A premium quality air source heat pump will usually cost around £7,000 to purchase, and with installation outlay factored in, somewhere between £10,000 and £10,500 to be properly fitted.

Depending on whether the property requires extra radiators for air source heat pumps, or another extra heating vice to ramp up the heat output such as underfloor heating, labour costs could be greater still.

But whilst air source heat pump installation costs are generally quite high, prospective buyers should consider that they will be eligible for financial assistance from the outset. From October 2023 onwards, the government has rewarded homeowners in the UK and Wales with £7,500 subsidies for switching to air source heat pumps from gas boilers in a bid to reduce carbon emissions overall.

For further information on how air source heat pumps work, and details on all their features and associated incentives, be sure to take a look at our dedicated blogs on the subject. Our Ultimate Guide To Air Source Heat Pumps and Heat Pump Grants – Your Key Questions Answered articles are live in the BestHeating Advice Centre. Or, you can explore air source heat pump advice from the Energy Saving Trust.

At the current rate, you can receive RHI payments at a rate of 10.85p per kW of energy used with relation to air source heat pumps up until March 2022.

For added context, air source heat pumps tend to provide around 3.4kW of heat for every 1kW of energy used, indicating how efficiently they perform.

From April 2022 and beyond, the government is set to replace the Renewable Heat Incentive scheme with up-front subsidies of £5,000 for households in the UK and Wales.

Learn more about all things air source heat pumps in our Ultimate Guide To Air Source Heat Pumps, or view more air source heat pump advice from the Energy Saving Trust.

The installation of an air source heat pump (ASHP) can enable you to reduce your energy bills and decrease your carbon footprint in comparison with a gas or electric heating system.

Essentially, to make the very most of an air source heat pump, and ensure it is operating in the most efficient manner possible, your home must be well insulated.

In ideal circumstances, underfloor heating would also be fitted.

Find out everything you need to know with regards to ASHP in our Ultimate Guide to Air Source Heat Pumps, or explore more air source heat pump advice from the Energy Saving Trust.

How can I get more information about heat pump grants?

For more information on the Boiler Upgrade Scheme and the Renewable Heat Incentive, you can check out the government website.

Alternatively, sites like Which? have excellent information on RHI qualifying criteria and there’s a wealth of other information on it’s way to the BestHeating Advice Centre, so watch this space!

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