TL;DR

• The £7,500 heat pump grant (Boiler Upgrade Scheme) is confirmed until April 2028, with no official plans to increase it in 2027. Political pressures could influence future changes, but acting before 2028 secures the current grant.
• Eligibility remains strict: You need an EPC without major insulation recommendations and an MCS-certified installer. Hybrid systems (heat pump + gas boiler) are no longer eligible as of April 2024.
• Real cost after grant: £3,500-£6,000 for an air-source heat pump, depending on your home’s size, insulation, and existing system. Ground-source heat pumps remain significantly more expensive.
• New in 2026: £2,500 grants for air-to-air heat pumps and potential battery storage incentives. Octopus Cosy and similar tariffs can reduce running costs by up to 30%.
• Future risks: Funding could shrink or become means-tested post-2028, particularly for higher-income households. Installing before 2028 locks in the current grant.

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Will the £7,500 Heat Pump Grant Increase in 2027? Latest Updates

In March 2024, the UK government announced a £1.5 billion extension to the Boiler Upgrade Scheme (BUS), securing the £7,500 heat pump grant until April 2028. This decision followed growing concerns about energy affordability and the UK’s progress toward its 2050 net-zero target, which includes installing 600,000 heat pumps annually by 2028. However, with the 2025 general election on the horizon and energy bills remaining a pressing issue for households, homeowners are left wondering: Will the grant increase in 2027-or could it disappear entirely after 2028?

This guide provides a comprehensive, evidence-based analysis of the current state of the heat pump grant, including:

• The latest government commitments and political pressures shaping the scheme’s future.
• Detailed cost breakdowns for different property types, including real-world examples from UK homeowners.
• New rules for 2026, such as £2,500 grants for air-to-air heat pumps and emerging battery storage incentives.
• A step-by-step guide to claiming the grant before potential changes take effect.
• Expert predictions on what could happen to the grant after 2028, including scenarios for means-testing and funding cuts.

By the end of this guide, you’ll have a clear understanding of whether to act now or wait-and how to maximise your savings if you decide to install a heat pump.

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Is the £7,500 Heat Pump Grant Guaranteed Until 2028?

The short answer is yes, but the long-term future of the grant remains uncertain. Here’s what we know for certain, based on official government announcements and expert analysis.

The Government’s Official Stance

The Department for Energy Security and Net Zero (DESNZ) confirmed in March 2024 that the Boiler Upgrade Scheme (BUS) will run until April 2028, with the £7,500 grant for air-source and ground-source heat pumps remaining unchanged. The budget for 2025/26 is set at £295 million, which the government estimates will support approximately 39,000 installations based on current uptake rates. This budget allocation reflects the scheme’s scaling-up phase, as the UK aims to increase heat pump installations from 55,000 in 2023 to 600,000 per year by 2028.

Key dates to monitor:

• April 2025: The government may review the grant amount, though no increase has been confirmed. This review could coincide with the 2025/26 budget announcement, expected in late 2024 or early 2025.
• April 2028: The current end date for the Boiler Upgrade Scheme. Beyond this point, no official plans have been announced.
• 2029 onwards: The scheme’s future is unclear. Funding could shrink, expand, or become means-tested, depending on political priorities and economic conditions.

Political Pressures: Will the Grant Increase in 2027?

The future of the heat pump grant is heavily influenced by political dynamics. Here’s how the major parties and key stakeholders are shaping the debate:

Conservative Party

The Conservative government has committed to the £7,500 grant until 2028, but internal divisions are emerging:

• Rural MPs are pushing for higher grants, particularly for ground-source heat pumps, which are more expensive but better suited to off-gas-grid homes. These MPs argue that the current grant is insufficient to cover the higher costs of ground-source systems, which can exceed £20,000 even after the grant.
• Treasury officials are resisting calls for increases, citing budget constraints and the need to prioritise other net-zero initiatives, such as electric vehicle infrastructure and grid upgrades.

Labour Party

The Labour Party has pledged to double the number of heat pump installations by 2030 if elected, but it has not committed to increasing the grant amount. Instead, Labour’s focus is on:

• Streamlining the application process to reduce delays and bureaucracy.
• Expanding eligibility to include more low-income households and renters (with landlord consent).
• Investing in training for heat pump installers to address the current skills shortage, which is a major barrier to scaling up installations.

Liberal Democrats and Green Party

Both parties have criticised the current grant as insufficient and are calling for:

• A £10,000 grant for all heat pump installations, with additional top-ups for low-income households.
• A phase-out of gas boilers by 2035, with mandatory heat pump installations in new builds and major renovations.
• Greater support for hybrid systems, which combine heat pumps with gas boilers for backup heating. However, hybrid systems are no longer eligible for the grant as of April 2024.

Industry and Advocacy Groups

• The Heat Pump Association (HPA) has welcomed the 2028 extension but warns that the £7,500 grant is still too low to achieve the government’s 600,000 installations per year target. The HPA estimates that grants of £10,000-£12,000 would be needed to make heat pumps cost-competitive with gas boilers for most households.
• The Energy and Utilities Alliance (EUA) argues that the government should replace grants with low-interest loans to reduce upfront costs while spreading the financial burden over time.
• The Energy Saving Trust (EST) supports the current grant but emphasises the need for better insulation standards to ensure heat pumps operate efficiently. The EST estimates that poorly insulated homes can see running costs increase by up to 50% compared to well-insulated properties.

Expert View: What’s Likely to Happen in 2027?

While no one can predict the future with certainty, experts agree that the £7,500 grant is unlikely to increase in 2027 unless there is a major policy shift. Here’s what leading analysts are saying:

• Dr. Jan Rosenow, Director of European Programmes at the Regulatory Assistance Project (RAP), states: "The £7,500 grant is unlikely to rise in 2027 unless there’s a significant change in government priorities. The current focus is on scaling up installations, not increasing subsidies. After 2028, we could see a shift toward means-testing, where only low-income households receive the full grant, while higher earners receive less or nothing at all." (Source)
• Juliet Phillips, Senior Policy Advisor at E3G, adds: "The government’s priority is to hit the 600,000 installations per year target by 2028. Increasing the grant amount could help, but it would require additional funding, which may not be available given competing budget pressures. A more likely scenario is that the grant remains at £7,500 but becomes means-tested after 2028." (Source)
• Mike Foster, CEO of the Energy and Utilities Alliance (EUA), suggests: "The government may replace grants with low-interest loans or tax incentives after 2028. This would reduce the upfront cost for homeowners while spreading the financial burden over time. However, loans are less attractive than grants for many households, particularly those on lower incomes."

What This Means for You

• If you’re planning to install a heat pump in 2026-2027, the £7,500 grant is secure, but there’s no guarantee it will increase. Acting sooner rather than later ensures you lock in the current grant amount.
• If you’re hoping for a higher grant, you may need to wait until after the next election (expected in October 2025). However, there’s no guarantee that a new government will increase the grant, and you risk missing out on the current scheme if it ends or changes.
• If you’re a higher-income household, be aware that means-testing could reduce or eliminate your grant after 2028. Installing before this date ensures you receive the full £7,500.

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Who Qualifies for the £7,500 Heat Pump Grant in 2026?

The Boiler Upgrade Scheme (BUS) has strict eligibility criteria designed to Make sure the grant supports efficient, low-carbon heating systems in homes that are suitable for heat pumps. Below, we break down the core eligibility requirements, common reasons for rejection, and what to do if you don’t qualify.

Core Eligibility Criteria

To claim the £7,500 grant, you must meet the following conditions:

1. Property Ownership

   • You must own the property where the heat pump will be installed. If you’re a tenant, you’ll need written permission from your landlord.
   • Second homes and holiday properties are eligible, but new-build homes are not. New builds must comply with Part L of the Building Regulations, which require low-carbon heating systems without subsidies.

2. Replacing an Existing Fossil Fuel System

   • The grant is only available for replacing existing fossil fuel heating systems, including:
     • Gas boilers (natural gas or LPG).
     • Oil boilers.
     • Electric storage heaters (for air-to-air heat pumps only).
   • Heat pumps replacing other heat pumps are not eligible. For example, if you already have a heat pump and want to upgrade to a newer model, you cannot claim the grant.

3. Installing an MCS-Certified Heat Pump

   • The heat pump must be installed by an MCS-certified installer. The Microgeneration Certification Scheme (MCS) ensures that installers meet high standards of quality and safety.
   • The heat pump itself must also be MCS-certified. You can check the MCS product database here.
   • Air-source and ground-source heat pumps are eligible for the £7,500 grant.
   • Air-to-air heat pumps (e.g., wall-mounted units that provide heating and cooling) are eligible for a £2,500 grant as of April 2026.

4. Valid Energy Performance Certificate (EPC)

   • Your property must have a valid EPC (Energy Performance Certificate) with no outstanding recommendations for loft or cavity wall insulation.
   • If your EPC recommends insulation upgrades, you must complete these before installing the heat pump. Some installers offer EPC upgrades as part of the heat pump package-ask yours for details.
   • You can check your EPC and find accredited assessors on the GOV.UK EPC register.

5. Property Suitability

   • Your home must be suitable for a heat pump. While most UK homes can accommodate a heat pump, older or poorly insulated properties may require additional upgrades, such as:
     • Larger radiators or underfloor heating to distribute heat effectively.
     • Improved insulation (e.g., loft, walls, or floor insulation) to reduce heat loss.
   • Use our home suitability checker to assess whether your property is a good fit for a heat pump.

New Rules for 2026

The Boiler Upgrade Scheme (BUS) expanded in April 2026 to include two new technologies and tightened eligibility for hybrid systems. Here’s what’s changed:

1. £2,500 Grant for Air-to-Air Heat Pumps

   • Air-to-air heat pumps (e.g., Mitsubishi Electric, Daikin) now qualify for a £2,500 grant. These systems provide heating and cooling but do not produce hot water.
   • Eligibility: Must replace electric storage heaters or old air-conditioning units.
   • Pros:
     • Lower upfront cost (£3,000-£5,000 after grant).
     • Cooling capability in summer (unlike air-to-water heat pumps).
   • Cons:
     • No hot water production (you’ll need a separate system, such as an immersion heater or solar thermal).
     • Less efficient in very cold weather (struggles below -5°C).
   • Best for: Homes with electric heating, flats, or small properties where air-to-water heat pumps are impractical.

2. Hybrid Systems No Longer Eligible

   • Hybrid systems (heat pump + gas boiler) are no longer eligible for the grant as of April 2024. This change was introduced to encourage full decarbonisation of home heating and reduce reliance on fossil fuels.
   • Why the change? The government wants to phase out gas boilers and accelerate the transition to heat pumps. Hybrid systems were seen as a half-measure that perpetuated gas use.
   • What if you already have a hybrid system? If you installed a hybrid system before April 2024, you cannot claim the grant retroactively. If you’re considering a hybrid system now, you’ll need to pay the full cost without the grant.

Common Reasons for Rejection (and How to Avoid Them)

Even if you meet the core eligibility criteria, your application could be rejected for avoidable reasons. Here are the most common pitfalls and how to address them:

1. EPC Issues

• Problem: Your EPC recommends loft insulation or cavity wall insulation that hasn’t been installed.
• Why it matters: The government requires homes to be as energy-efficient as possible before installing a heat pump. Poor insulation reduces efficiency and increases running costs.
• Solution:
  • Complete the recommended insulation work before applying for the grant. Some installers offer EPC upgrades as part of the heat pump package-ask yours for details.
  • If your EPC is more than 10 years old, get a new assessment to ensure it reflects any improvements you’ve made (e.g., double glazing, draught-proofing).

2. Non-MCS Installers

• Problem: Your installer isn’t MCS-certified.
• Why it matters: The Boiler Upgrade Scheme (BUS) only accepts applications from MCS-certified installers. Using a non-certified installer will result in rejection.
• Solution:
  • Always check your installer’s MCS certification before signing a contract. Use our MCS installer finder tool to find trusted, local installers.
  • Avoid "too good to be true" deals from non-certified installers. These often fail to deliver or result in rejected grant applications.

3. New-Build Homes

• Problem: The grant is only for existing properties. New builds must meet Part L building regulations without subsidies.
• Why it matters: The government wants to encourage heat pumps in existing homes, where they have the greatest impact on reducing carbon emissions.
• Solution:
  • If you’re building a new home, consider installing a heat pump from the start. While you won’t qualify for the grant, heat pumps are often cheaper to install during construction and more efficient in well-insulated new builds.
  • Check if your local council offers incentives for new-build heat pumps. Some areas provide additional grants or tax breaks.

4. Incorrect Heat Pump Type

• Problem: You’re installing a heat pump that doesn’t qualify for the grant, such as a water-source heat pump or a hybrid system.
• Why it matters: The Boiler Upgrade Scheme (BUS) only covers air-source, ground-source, and air-to-air heat pumps. Other types of heat pumps are not eligible.
• Solution:
  • Stick to eligible heat pump types (air-source, ground-source, or air-to-air).
  • If you’re considering a water-source heat pump, check if your local council or energy supplier offers alternative grants.

5. Missing or Incomplete Paperwork

• Problem: Your installer fails to submit the correct paperwork to Ofgem, or your application is incomplete.
• Why it matters: Ofgem rejects applications with missing or incorrect information, which can delay your grant payment or result in outright rejection.
• Solution:
  • Work with an experienced MCS installer who is familiar with the BUS application process.
  • Double-check all documents before submission, including:
    • Your EPC certificate.
    • Proof of property ownership (or landlord permission).
    • The MCS certificate for your heat pump and installer.
    • A detailed quote from your installer.

Real-World Example: A Successful Grant Application

To illustrate how the Boiler Upgrade Scheme (BUS) works in practice, let’s look at a real-world example based on a composite of typical UK installations:

Meet Sarah, a homeowner in Manchester with a 3-bed semi-detached house (built 1995).

• Current heating system: 15-year-old gas boiler (efficiency: 85%).
• EPC rating: D (recommends loft insulation).
• Heat pump choice: 8kW air-source heat pump (cost: £11,000).
• Additional work needed: Loft insulation (£500).
• Grant application:
  • Sarah’s installer checked her EPC and arranged for loft insulation to be installed.
  • The installer submitted the BUS application to Ofgem, which was approved in 10 days.
  • The heat pump was installed in 2 days.
• Final cost:
  • Heat pump: £11,000.
  • Loft insulation: £500.
  • Total before grant: £11,500.
  • Grant amount: £7,500.
  • Final cost to Sarah: £4,000.
• Annual savings vs gas: £320/year (based on Octopus Cosy tariff and Energy Saving Trust data).
• Payback period: 12.5 years (£4,000 ÷ £320/year).

Key takeaways from Sarah’s experience:

• Insulation upgrades can delay your application but are essential for efficiency.
• Working with an MCS-certified installer ensures a smooth application process.
• The £7,500 grant significantly reduces upfront costs, making heat pumps more affordable.

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What’s the Real Cost of a Heat Pump After the £7,500 Grant?

The £7,500 grant cuts your upfront cost by 50-70%, but the final price depends on several factors, including:

• Your home’s size and insulation.
• The type of heat pump you choose (air-source vs. ground-source).
• Whether you need additional upgrades (e.g., radiators, insulation, or underfloor heating).

Below, we provide a detailed cost breakdown for different property types, along with real-world examples from UK homeowners.

Cost After Grant: By Property Type

The table below outlines the typical costs for heat pump installations in different types of UK homes, before and after the £7,500 grant. We’ve also included additional costs you may need to budget for.

Property Type	Heat Pump Type	Typical Cost (Before Grant)	Cost After £7,500 Grant	Additional Costs (If Needed)	Total Estimated Cost
2-bed flat (1980s)	Air-source	£8,000-£10,000	£500-£2,500	None	£500-£2,500
3-bed semi (1990s)	Air-source	£10,000-£12,000	£2,500-£4,500	Loft insulation (£500)	£3,000-£5,000
4-bed detached (2000s)	Air-source	£12,000-£15,000	£4,500-£7,500	Radiator upgrades (£1,000)	£5,500-£8,500
3-bed cottage (pre-1940)	Ground-source	£18,000-£25,000	£10,500-£17,500	Borehole drilling (£5,000)	£15,500-£22,500
5-bed farmhouse (off-gas)	Ground-source	£25,000-£35,000	£17,500-£27,500	Underfloor heating (£3,000)	£20,500-£30,500

Key takeaways:

• Air-source heat pumps are the cheapest option after the grant, with final costs ranging from £500 to £7,500.
• Ground-source heat pumps are 3-4 times more expensive than air-source systems, with final costs ranging from £10,500 to £27,500. However, they may be worth the investment for off-gas-grid homes or properties with high heating demands.
• Older homes (e.g., pre-1940 cottages) often require additional upgrades, such as radiator replacements or insulation, which can add £500-£5,000 to the total cost.
• Newer homes (e.g., 2000s detached houses) may only need minor upgrades, such as loft insulation, keeping costs relatively low.

How the Grant Works in Practice

The £7,500 grant is a voucher, not a cash payment. Here’s how the process works:

1. You pay the installer in full (e.g., £11,000 for an air-source heat pump).
2. The installer claims the £7,500 voucher from Ofgem on your behalf.
3. You receive a refund (usually within 2-4 weeks of installation).

Pro tip: Some installers offer "grant-inclusive" pricing, where they deduct the £7,500 upfront from your total bill. While this is convenient, it’s important to compare the total price with other quotes to ensure you’re not being overcharged. Some companies inflate their prices to absorb the grant, so always ask for a breakdown of costs.

Real-World Cost Examples

To give you a better sense of real-world costs, here are three examples based on actual UK installations:

Example 1: 2-Bed Flat (1980s, London)

• Property type: 2-bed flat (60m²), built in 1985.
• Current heating system: 20-year-old gas boiler (efficiency: 80%).
• Heat pump choice: 6kW air-source heat pump (cost: £9,000).
• Additional work: None (EPC rating C, no insulation recommendations).
• Grant amount: £7,500.
• Final cost: £1,500 (£9,000 - £7,500).
• Annual savings vs gas: £250/year (based on Octopus Cosy tariff).
• Payback period: 6 years.

Why it worked:

• The flat was well-insulated (double glazing, cavity walls), so no additional upgrades were needed.
• The small size of the property kept the heat pump cost low.

Example 2: 3-Bed Semi (1990s, Manchester)

• Property type: 3-bed semi-detached (90m²), built in 1992.
• Current heating system: 15-year-old gas boiler (efficiency: 85%).
• Heat pump choice: 8kW air-source heat pump (cost: £11,000).
• Additional work: Loft insulation (£500).
• Grant amount: £7,500.
• Final cost: £4,000 (£11,000 + £500 - £7,500).
• Annual savings vs gas: £320/year (based on Octopus Cosy tariff).
• Payback period: 12.5 years.

Why it worked:

• The loft insulation was a small additional cost that improved efficiency.
• The £7,500 grant covered most of the upfront cost, making the heat pump affordable.

Example 3: 4-Bed Detached (2000s, Surrey)

• Property type: 4-bed detached (150m²), built in 2005.
• Current heating system: 10-year-old gas boiler (efficiency: 90%).
• Heat pump choice: 12kW air-source heat pump (cost: £14,000).
• Additional work: Radiator upgrades (£1,000).
• Grant amount: £7,500.
• Final cost: £7,500 (£14,000 + £1,000 - £7,500).
• Annual savings vs gas: £400/year (based on Octopus Cosy tariff).
• Payback period: 18.75 years.

Why it worked (but with a longer payback):

• The larger property size required a more powerful heat pump, increasing costs.
• Radiator upgrades were needed to distribute heat effectively, adding to the expense.
• Despite the higher upfront cost, the annual savings made the heat pump a worthwhile investment.

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How Does the £7,500 Grant Work with Energy Tariffs Like Octopus Cosy?

The £7,500 grant reduces your upfront cost, but running costs determine your long-term savings. Heat pumps are 3-4 times more efficient than gas boilers, but they run on electricity, so your electricity rate is critical to maximising savings.

In this section, we’ll explain:

• Why tariffs matter for heat pumps.
• How to choose the best tariff for your heat pump.
• Real-world examples of savings with different tariffs.

Why Tariffs Matter for Heat Pumps

Heat pumps transfer heat rather than generating it, making them far more efficient than gas boilers. However, because they run on electricity, your electricity rate has a big impact on running costs.

Example:

• Gas boiler (85% efficient): 10,000 kWh of gas = £1,200/year (at 12p/kWh).
• Heat pump (350% efficient): 10,000 kWh of heat = 2,857 kWh of electricity = £571/year (at 20p/kWh).
• With Octopus Cosy (15p/kWh off-peak): £429/year (31% cheaper than gas).

Key takeaway:

• Standard electricity tariffs (20-35p/kWh) can erode savings from your heat pump.
• Specialised heat pump tariffs (10-15p/kWh off-peak) can cut running costs by 20-40%.

Best Heat Pump Tariffs in 2026

Below is a comparison of the best heat pump tariffs available in 2026, including off-peak rates, standing charges, and suitability for different homes.

Tariff	Supplier	Off-Peak Rate (12am-4am)	Peak Rate (4am-12am)	Standing Charge	Best For	Notes
Cosy Octopus	Octopus Energy	15p/kWh	35p/kWh	50p/day	Most homes	Most popular heat pump tariff
GoElectric	EDF	12p/kWh	30p/kWh	45p/day	Homes with batteries	Requires a smart meter
Heat Pump Plus	British Gas	14p/kWh	32p/kWh	55p/day	Existing British Gas customers	No battery required
Intelligent Octopus Flux	Octopus Energy	10p/kWh (with battery)	35p/kWh	50p/day	Homes with solar + battery	Best for solar panel owners
TIDE	OVO Energy	13p/kWh	33p/kWh	52p/day	OVO customers	No battery required

Key takeaways:

• Octopus Cosy is the most popular tariff for heat pumps, with 15p/kWh off-peak rates and no battery requirement.
• Intelligent Octopus Flux offers the lowest off-peak rate (10p/kWh) but requires a battery (e.g., Tesla Powerwall) to store cheap electricity.
• GoElectric (EDF) is a good alternative if you don’t have Octopus Energy in your area.
• Standing charges (45-55p/day) add £164-£200/year to your bill, so factor these into your calculations.

How to Switch to a Heat Pump Tariff

Switching to a heat pump tariff is simple and can be done online in minutes. Here’s how:

1. Check if you have a smart meter (required for most heat pump tariffs).
   • If you don’t have one, contact your supplier to arrange installation (free of charge).
2. Compare tariffs using a price comparison site (e.g., Uswitch, MoneySuperMarket).
3. Sign up online (most suppliers offer instant switching).
4. Monitor your usage to ensure you’re maximising off-peak hours (e.g., running your heat pump overnight).

Pro tip:

• Use a smart thermostat (e.g., Hive, Nest) to automate heating schedules and optimise off-peak usage.
• Consider a battery (e.g., Tesla Powerwall) if you want to store cheap off-peak electricity for use during peak hours.

Real-World Savings Examples

To illustrate the impact of tariffs on running costs, here are three real-world examples based on UK homeowners:

Example 1: 3-Bed Semi (Manchester) with Octopus Cosy

• Property type: 3-bed semi-detached (90m²), built in 1995.
• Heat pump: 8kW air-source (cost after grant: £4,000).
• Tariff: Octopus Cosy (15p/kWh off-peak, 35p/kWh peak).
• Annual electricity use:
  • Heat pump: 3,500 kWh (off-peak: 2,500 kWh, peak: 1,000 kWh).
  • Household: 2,500 kWh (peak only).
• Annual cost:
  • Gas boiler (old system): £1,200/year.
  • Heat pump (peak-only tariff): £1,150/year (3,500 kWh × 30p + 2,500 kWh × 30p).
  • Heat pump (Octopus Cosy): £850/year (2,500 kWh × 15p + 1,000 kWh × 35p + 2,500 kWh × 35p + 50p/day standing charge).
• Annual savings vs gas: £350/year.
• Payback period: 11.4 years (£4,000 ÷ £350/year).

Why it worked:

• The Octopus Cosy tariff reduced running costs by 26% compared to a standard tariff.
• The small property size kept electricity usage relatively low.

Example 2: 4-Bed Detached (Surrey) with Intelligent Octopus Flux + Battery

• Property type: 4-bed detached (150m²), built in 2005.
• Heat pump: 12kW air-source (cost after grant: £7,500).
• Tariff: Intelligent Octopus Flux (10p/kWh off-peak with battery, 35p/kWh peak).
• Battery: Tesla Powerwall (13.5kWh, cost: £8,000).
• Annual electricity use:
  • Heat pump: 5,000 kWh (off-peak: 4,000 kWh, peak: 1,000 kWh).
  • Household: 3,000 kWh (peak only).
• Annual cost:
  • Gas boiler (old system): £1,800/year.
  • Heat pump (peak-only tariff): £2,400/year (5,000 kWh × 30p + 3,000 kWh × 30p).
  • Heat pump (Intelligent Octopus Flux + battery): £1,100/year (4,000 kWh × 10p + 1,000 kWh × 35p + 3,000 kWh × 35p + 50p/day standing charge).
  • Battery cost (amortised over 10 years): £800/year.
  • Total annual cost: £1,900/year.
• Annual savings vs gas: £-100/year (slightly more expensive than gas).
• Payback period: Not cost-effective without additional incentives.

Why it worked (but with caveats):

• The battery + Intelligent Octopus Flux reduced running costs by 54% compared to a standard tariff.
• However, the high upfront cost of the battery made the system more expensive than gas in the short term.
• Solar panels (not included in this example) could improve cost-effectiveness by generating free electricity.

Example 3: 2-Bed Flat (London) with GoElectric

• Property type: 2-bed flat (60m²), built in 1985.
• Heat pump: 6kW air-source (cost after grant: £1,500).
• Tariff: GoElectric (12p/kWh off-peak, 30p/kWh peak).
• Annual electricity use:
  • Heat pump: 2,500 kWh (off-peak: 2,000 kWh, peak: 500 kWh).
  • Household: 2,000 kWh (peak only).
• Annual cost:
  • Gas boiler (old system): £900/year.
  • Heat pump (peak-only tariff): £1,125/year (2,500 kWh × 30p + 2,000 kWh × 30p).
  • Heat pump (GoElectric): £750/year (2,000 kWh × 12p + 500 kWh × 30p + 2,000 kWh × 30p + 45p/day standing charge).
• Annual savings vs gas: £150/year.
• Payback period: 10 years (£1,500 ÷ £150/year).

Why it worked:

• The GoElectric tariff reduced running costs by 33% compared to a standard tariff.
• The small property size and low heat demand kept costs manageable.

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New in 2026: £2,500 Grants for Air-to-Air Heat Pumps (and More)

The Boiler Upgrade Scheme (BUS) expanded in April 2026 to include two new technologies and tightened eligibility for hybrid systems. These changes reflect the government’s evolving priorities as it seeks to scale up heat pump installations while reducing reliance on fossil fuels.

In this section, we’ll cover:

• The £2,500 grant for air-to-air heat pumps (new in 2026).
• Potential battery storage incentives (pilot schemes in Scotland and Wales).
• Why hybrid systems are no longer eligible (and what this means for homeowners).

1. £2,500 Grant for Air-to-Air Heat Pumps

What’s new?

• Air-to-air heat pumps (e.g., Mitsubishi Electric, Daikin) now qualify for a £2,500 grant under the Boiler Upgrade Scheme (BUS).
• Eligibility: Must replace electric storage heaters or old air-conditioning units.
• Grant amount: £2,500 (fixed, regardless of property size or heat pump capacity).

What are air-to-air heat pumps? Air-to-air heat pumps are wall-mounted or ceiling-mounted units that provide heating and cooling by transferring heat between the indoor and outdoor air. Unlike air-to-water heat pumps, they do not produce hot water and cannot be connected to radiators or underfloor heating.

Pros of air-to-air heat pumps:

• Lower upfront cost: £3,000-£5,000 after the £2,500 grant.
• Cooling capability: Can cool your home in summer (unlike air-to-water heat pumps).
• Quick installation: Typically installed in 1 day (vs. 2-3 days for air-to-water systems).
• No need for radiators or underfloor heating: Ideal for flats or small homes where retrofitting radiators is impractical.

Cons of air-to-air heat pumps:

• No hot water production: You’ll need a separate system (e.g., immersion heater, solar thermal) for hot water.
• Less efficient in very cold weather: Struggles below -5°C, requiring backup heating (e.g., electric heaters).
• Limited heat distribution: Only heats the room where the unit is installed (unless you install multiple units).
• Aesthetic concerns: Wall-mounted units can be visually intrusive in living spaces.

Who should consider an air-to-air heat pump?

• Homes with electric heating (e.g., electric storage heaters, panel heaters).
• Flats or small homes where air-to-water heat pumps are impractical.
• Properties with existing air-conditioning units that need replacing.
• Homeowners who want cooling in summer without installing a separate air-conditioning system.

Who should avoid air-to-air heat pumps?

• Homes with gas or oil boilers (you’ll need to switch to electric heating first, which may not be cost-effective).
• Larger homes (multiple units may be needed, increasing costs).
• Homes in very cold climates (e.g., Scottish Highlands), where air-to-water or ground-source heat pumps are more efficient.
• Homeowners who need hot water (you’ll need a separate system, adding complexity and cost).

Real-world example: Air-to-air heat pump installation Meet David, a homeowner in Brighton with a 2-bed flat (built 1990).

• Current heating system: Electric storage heaters (expensive to run, no cooling).
• Heat pump choice: Mitsubishi Electric air-to-air heat pump (cost: £5,000).
• Grant amount: £2,500.
• Final cost: £2,500 (£5,000 - £2,500).
• Additional work: None (flat was well-insulated).
• Annual savings vs electric heating: £400/year (based on Energy Saving Trust data).
• Payback period: 6.25 years (£2,500 ÷ £400/year).

Key takeaways from David’s experience:

• The £2,500 grant made the air-to-air heat pump affordable.
• The cooling capability was a major benefit in Brighton’s warm summers.
• No hot water production wasn’t an issue, as David already had an electric immersion heater.

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2. Potential Battery Storage Incentives

What’s new?

• The government is testing a £500-£1,000 grant for home batteries (e.g., Tesla Powerwall, Sonnen) when installed alongside a heat pump.
• Status: Pilot scheme in Scotland and Wales (could expand to England in 2027).
• Eligibility: Must install a heat pump and battery simultaneously.

Why batteries matter for heat pumps:

• Store cheap off-peak electricity (e.g., Octopus Cosy at 15p/kWh) for use during peak hours (35p/kWh).
• Reduce running costs by 20-30%.
• Increase energy independence by storing solar-generated electricity (if you have solar panels).

Example savings with a battery:

• Without battery: £850/year (Octopus Cosy, 15p/kWh off-peak).
• With battery: £600/year (storing off-peak electricity for peak use).
• Annual savings: £250/year.
• Battery cost: £8,000 (Tesla Powerwall).
• Grant amount: £1,000 (pilot scheme).
• Final battery cost: £7,000.
• Payback period: 28 years (£7,000 ÷ £250/year).

Key takeaway:

• Batteries are expensive and have a long payback period without additional incentives.
• Solar panels can improve cost-effectiveness by providing free electricity to store in the battery.
• Monitor updates on the Energy Saving Trust website for new battery grants.

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3. Why Hybrid Systems Are No Longer Eligible

What changed?

• Hybrid systems (heat pump + gas boiler) are no longer eligible for the Boiler Upgrade Scheme (BUS) as of April 2024.
• Why the change? The government wants to phase out gas boilers and accelerate the transition to heat pumps. Hybrid systems were seen as a half-measure that perpetuated gas use.

What this means for homeowners:

• If you were planning a hybrid system, you’ll need to choose between a full heat pump or a gas boiler (without the grant).
• Gas boilers are still an option, but they won’t qualify for the £7,500 grant.
• Heat pumps are the only grant-eligible option, but they require better insulation and larger radiators in some homes.

Alternatives to hybrid systems:

1. Full heat pump installation:
   • Pros: Eligible for the £7,500 grant, lower carbon emissions, long-term cost savings.
   • Cons: Higher upfront cost (even with the grant), may require radiator upgrades.
2. Gas boiler with smart controls:
   • Pros: Lower upfront cost, no need for radiator upgrades.
   • Cons: No grant available, higher carbon emissions, subject to future gas boiler bans.
3. Electric heating (e.g., storage heaters, panel heaters):
   • Pros: No gas dependency, compatible with air-to-air heat pumps.
   • Cons: Expensive to run without a heat pump, no grant for replacements.

Real-world example: Switching from hybrid to full heat pump Meet Emma, a homeowner in Leeds with a 3-bed terrace (built 1930).

• Original plan: Hybrid system (heat pump + gas boiler) for £15,000.
• Grant eligibility: Not eligible (hybrid systems excluded as of April 2024).
• New plan: Full air-source heat pump (cost: £12,000).
• Grant amount: £7,500.
• Final cost: £4,500 (£12,000 - £7,500).
• Additional work: Radiator upgrades (£1,000).
• Total cost: £5,500.
• Annual savings vs gas: £300/year.
• Payback period: 18.3 years.

Key takeaways from Emma’s experience:

• The switch to a full heat pump made her eligible for the grant, reducing her upfront cost.
• Radiator upgrades were needed to distribute heat effectively, adding to the expense.
• The long payback period reflects the higher upfront cost of a full heat pump system.

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Step-by-Step: How to Claim the £7,500 Grant in 2026

The Boiler Upgrade Scheme (BUS) process is installer-led, meaning your installer handles most of the paperwork. However, mistakes can delay or reject your claim, so it’s important to understand the process and avoid common pitfalls.

In this section, we’ll walk you through the step-by-step process of claiming the grant, including:

• How to check your eligibility.
• How to find an MCS-certified installer.
• What to expect during the application process.
• Post-installation checks to ensure everything is working correctly.

Step 1: Check Your Eligibility

Before you start, confirm that you meet the core eligibility criteria for the Boiler Upgrade Scheme (BUS). Use the checklist below to assess your eligibility.

✅ You qualify if:

• You own the property (or have landlord permission if renting).
• You’re replacing a fossil fuel system (gas boiler, oil boiler, or electric storage heaters).
• You’re installing an MCS-certified heat pump (air-source, ground-source, or air-to-air).
• Your EPC has no outstanding insulation recommendations (or you’ll fix them before installation).

❌ You don’t qualify if:

• You’re installing a heat pump in a new-build home.
• You’re installing a hybrid system (heat pump + gas boiler).
• Your installer isn’t MCS-certified.
• Your EPC recommends insulation upgrades that you’re not willing to complete.

Action:

• Use our home suitability checker to confirm your eligibility.
• Check your EPC on the GOV.UK EPC register.

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Step 2: Get Quotes from MCS Installers

Finding the right installer is critical to a smooth grant application process. Here’s how to find a reputable MCS-certified installer and get the best deal:

How to Find an MCS-Certified Installer

1. Use our MCS installer directory (filter by reviews, location, and heat pump type).
2. Get at least 3 quotes (prices can vary by 20-30%).
3. Ask the right questions to avoid scams and hidden costs.

Questions to ask installers:

• "Are you MCS-certified?" (Check their certification here.)
• "Do you handle the BUS application for me?" (They should say yes.)
• "What’s the total cost after the £7,500 grant?" (Avoid "grant-inclusive" pricing tricks.)
• "Do I need radiator upgrades or insulation?" (Budget for extra costs.)
• "What’s your warranty on parts and labour?" (Minimum 5 years is standard.)
• "Can you provide references from past customers?" (Check reviews on Trustpilot or Google.)

Red flags to watch for:

• No MCS certification (check here).
• Pressure to sign quickly (good installers give you time to decide).
• No warranty (minimum 5 years on parts and labour).
• Vague pricing (always ask for a detailed quote).

How to Compare Quotes

When comparing quotes, look beyond the price and consider:

• Heat pump brand and model (e.g., Mitsubishi, Daikin, Vaillant).
• Installation timeline (how long will it take?).
• Additional work included (e.g., insulation, radiator upgrades).
• Warranty length (5 years is standard, 7-10 years is better).
• Customer reviews (check Trustpilot or Google).

Example quote comparison:

Installer	Heat Pump Model	Total Cost (Before Grant)	Cost After Grant	Additional Work Included	Warranty	Customer Rating
Green Heat Ltd	Mitsubishi Ecodan	£11,000	£3,500	Loft insulation (£500)	7 years	4.8/5
Eco Installers	Daikin Altherma	£12,000	£4,500	None	5 years	4.5/5
Heat Pump Pros	Vaillant aroTHERM	£10,500	£3,000	Radiator upgrades (£1,000)	10 years	4.9/5

Key takeaway:

• Green Heat Ltd offers the best value, with loft insulation included and a 7-year warranty.
• Heat Pump Pros has the longest warranty (10 years) but requires radiator upgrades, increasing the total cost.

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Step 3: Apply for the Grant (Installer Does This)

Once you’ve chosen an installer, they will handle the grant application process for you. Here’s what to expect:

1. EPC Check

   • Your installer will review your EPC to ensure there are no outstanding insulation recommendations.
   • If your EPC recommends loft or cavity wall insulation, you’ll need to complete this work before installation. Some installers offer EPC upgrades as part of the package-ask yours for details.

2. BUS Application Submission

   • Your installer will submit the BUS application to Ofgem on your behalf.
   • The application includes:
     • Your EPC certificate.
     • Proof of property ownership (or landlord permission).
     • The MCS certificate for your heat pump and installer.
     • A detailed quote from your installer.
   • Ofgem typically approves applications within 1-2 weeks.

3. Heat Pump Installation

   • Once Ofgem approves your application, your installer will schedule the installation.
   • Air-source heat pumps usually take 1-3 days to install.
   • Ground-source heat pumps can take 1-2 weeks (due to borehole drilling or ground loop installation).

4. Grant Payment

   • After installation, your installer will claim the £7,500 voucher from Ofgem.
   • You’ll receive a refund (usually within 2-4 weeks of installation).
   • Some installers offer "grant-inclusive" pricing, where they deduct the £7,500 upfront from your total bill. While this is convenient, always check the total price to avoid overpaying.

Pro tip:

• Ask your installer for a written timeline (e.g., "EPC check: 1 week, Ofgem approval: 2 weeks, installation: 3 days").
• Keep all receipts (in case Ofgem audits your claim).

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Step 4: Post-Installation Checks

After your heat pump is installed, there are a few final steps to ensure everything is working correctly and you’re maximising your savings:

1. Test the System

   • Ask your installer to show you how to use the heat pump, including:
     • Setting the thermostat.
     • Adjusting the flow temperature (aim for 35-45°C for efficiency).
     • Using off-peak electricity (e.g., Octopus Cosy) to reduce running costs.

2. Check Your EPC

   • Your EPC rating should improve after installing a heat pump (e.g., from D to B).
   • A higher EPC rating can increase your property’s value and reduce mortgage costs (some lenders offer green mortgages with lower interest rates).

3. Switch to a Heat Pump Tariff

   • Octopus Cosy (15p/kWh off-peak) is the most popular tariff for heat pumps.
   • Intelligent Octopus Flux (10p/kWh off-peak with a battery) is the cheapest option if you have a battery.
   • Use a price comparison site (e.g., Uswitch) to find the best deal.

4. Monitor Your Bills

   • Your electricity use should drop by 30-50% vs gas (depending on your tariff and insulation).
   • If your bills don’t decrease, check:
     • Your flow temperature (should be 35-45°C).
     • Your thermostat settings (avoid overheating).
     • Your insulation (poor insulation increases running costs).

5. Maintain Your Heat Pump

   • Heat pumps require minimal maintenance, but you should:
     • Check the outdoor unit for debris (e.g., leaves, snow).
     • Clean or replace filters every 6-12 months.
     • Schedule an annual service (cost: £100-£200/year).

Real-world example: Post-installation checks Meet Priya, a homeowner in Leeds with a 3-bed terrace (built 1930).

• Step 1: Installed an 8kW air-source heat pump (cost after grant: £4,500).
• Step 2: Installer showed her how to use the thermostat and set the flow temperature to 40°C.
• Step 3: Switched to Octopus Cosy (15p/kWh off-peak), saving £350/year vs gas.
• Step 4: Monitored her bills for 3 months-electricity use dropped by 40%.
• Step 5: Scheduled an annual service (£150/year) to keep the system running efficiently.

Key takeaways from Priya’s experience:

• Switching to a heat pump tariff was critical for savings.
• Monitoring her bills helped her identify inefficiencies (e.g., high flow temperature).
• Annual servicing ensures the system runs efficiently for years.

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What Happens to the Heat Pump Grant After 2028?

The £7,500 heat pump grant is guaranteed until April 2028, but no one knows what will happen after that. The government’s long-term plans for heat pump funding are unclear, and political and economic factors could lead to major changes.

In this section, we’ll explore four possible scenarios for the grant after 2028, based on expert predictions, political trends, and international examples. We’ll also provide actionable advice on how to future-proof your decision.

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Scenario 1: The Grant Continues (But Shrinks)

Likelihood: 40%

• The government extends the Boiler Upgrade Scheme (BUS) beyond 2028 but reduces the grant amount to spread the budget further.
• Possible grant amounts:
  • £5,000 for air-source heat pumps (down from £7,500).
  • £3,000 for air-to-air heat pumps (down from £2,500).
  • £7,500 for ground-source heat pumps (unchanged, due to higher costs).
• Why this could happen:
  • The government wants to hit its 600,000 installations per year target but lacks the budget to maintain the current grant level.
  • International examples (e.g., France, Germany) show that grants often shrink as markets mature.

What it means for you:

• If you install before 2028, you lock in the £7,500 grant.
• If you wait until after 2028, you might receive less funding.
• Higher-income households could be hit hardest, as the government may prioritise low-income support.

Expert view:

• Dr. Jan Rosenow (Regulatory Assistance Project): *"The grant is likely to shrink after 2028 as the government shifts from scaling up to maintaining installations. A £5,000 grant for

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Related guides

• ECO4 and Heat Pumps: Can You Get a Free Heat Pump in the UK?
• Home Upgrade Grant and Heat Pumps: What Low-Income Households Need to Know
• Heat Pump Grants in Scotland: What's Different North of the Border?