Heat pump grants available from today – here's how to get £7,500 off the cost

If you’ve been on the fence about getting a heat pump, could the move to boost the grants from £5,000 to £7,500 be the thing that swings it for you?

Prime Minister Rishi Sunak made this announcement about the 50pc increase on September 20 during a major speech on green policies.

The higher grants, available under the boiler upgrade scheme, are now available, meaning households can get additional help to cover the cost of switching up their heating systems. If you’re awarded a grant, the money will not need to be repaid.

Right now, heat pumps are the frontrunner to replace oil and gas boilers over the next few decades, as new installations are being banned for some households from 2035.

But while this more generous handout may make the prospect of one of these devices that little bit more attractive, making the switch may still not be all plain sailing.

Here are some of the things you need to weigh up before taking the plunge.

Could grant waiting lists get longer?

With a higher level of financial assistance on offer, you might find you’re joining a flood of requests for help upgrading your boiler.

Bean Beanland, of the Heat Pump Federation, said: “There is no doubt this change will increase sales activity in the market segment where a heat pump can now be deployed at close to zero contribution from the homeowner.”

But if, as some are predicting, we see an increase in order levels come quite quickly, do you need to worry about long waiting lists?

Josh Jackman, of The Eco Experts, a consultancy, thinks such fears are unwarranted.

He said: “I wouldn’t be concerned about lengthy waiting lists, as the Government is terrible at publicising the scheme and convincing people to take advantage of it. In its first year, the scheme had a target of 30,000 heat pump installations, and managed fewer than 11,000.”

Industry bodies say they are working with Ofgem to avoid delays – though how this ends up playing out in practice remains to be seen.

What if heat pump prices drop further?

The typical cost of buying and installing a heat pump can range from £7,000 to £13,000 – though prices do seem to be coming down.

The Government expects the cost to reduce in the coming years, but we’ve already seen a number of lower-cost heat pumps enter the market in recent months.

With this in mind, you may be wondering whether to hedge your bets and wait to see if prices drop further before getting a heat pump installed. You might also feel there’s less of a rush to make the switch, given the delay to the boiler ban.

Jump the gun, and you risk missing out on a cheaper – and possibly more efficient – device a few years down the line.

But this isn’t a given. At the same time, you might also want to give thought to the upcoming general election. Should Labour come into power, it’s not yet clear whether Sir Keir Starmer plans to mirror Tory plans for heat pump grants.

They could stay as they are, become more generous or be scrapped altogether. While the grant does exist, you might want to switch now if you want to take advantage.

Some experts think biting the bullet now could be a way to future-proof your home.

Mr Jackman said: “If you’re thinking of getting a heat pump, this is the time. The new grant rate – which won’t last forever – considerably reduces the average price of an air source heat pump.

“When you combine that with the low prices and special tariffs offered by heat pump suppliers, such as Octopus and Ovo, this is the perfect moment to invest.”

Others share a similar view. Mr Beanland said: “As with all government grant programmes, there is almost no certainty of continuity, especially across any change of government. With this in mind, the advice should probably be to take the new increased grant level now.”

He also warns that costs in future are unlikely to drop dramatically. “It must be remembered that heat pumps are a mature technology, so very significant reductions in capital costs are unlikely in the short term.”

Am I eligible for a heat pump grant?

Recent research by home efficiency innovation platform Snugg found just over two-thirds of people assume they are not eligible for government grants, with a similar number falsely believing the help is only available for low-income households.

But this is not the case: the boiler upgrade scheme is not a means-tested form of assistance.

To be eligible for a grant, you are required to own your own house, and your property must have an installation capacity of 45kWh (which covers most homes).

Your home also needs to have a valid Energy Performance Certificate (EPC). In addition, homes must already be well insulated in order for the heat pumps to be effective.

To apply, you’ll need to find an installer who’s accredited by the Microgeneration Certification Scheme (MCS), as they have to claim the grant on your behalf.

They will be able to tell you whether your home is suitable for a heat pump, and if you can get the grant.

Note that not all properties will be compatible, and others will require work to be carried out to make them compatible.

Recent research by heating experts Fair Fix found that, aside from cost, another key reason many homeowners haven’t considered making the switch to a heat pump is the required changes to their home.

Not only does this mean upheaval, but also the cost of, say, upgrading radiators or improving insulation being added to the bill.

You also need to be aware that while some lucky homeowners will be able to foot the majority of the expense with the £7,500 handout, for others, this grant will fall short of covering the cost.

If this is the case, it’s down to you to pay the difference.

Say, for example, you’re facing a heat pump bill that comes in at the higher of the range – closer to £13,000 – this will mean still having to stump up £5,500 out of your own pocket.

While figures from the Energy Saving Trust suggesting a standard air source heat pump in a three-bedroom home can potentially shave just under £400 off a household’s annual fuel bill are persuasive, there will be some who feel that heat pumps need to be more competitive with boilers to justify the transition.

How many people will actually benefit?

The original scheme, due to run until the end of March 2025, was expected to pay for around 90,000 installations.

However, while the potential grants to individual households has been increased, the scheme’s overall budget has not.

Mr Jackman said: “We’ve been told more funding might be available for the scheme, but we won’t know for sure until the Autumn Statement in November. If we’re stuck with the current funding level of £450m, the scheme will only benefit 60,000 homes.”

Mr Beanland added: “The higher grant levels mean fewer vouchers will be available. Consumers would do well to note this.”

So, if you are thinking about biting the bullet and making the switch away from your boiler, you might want to get your skates on, while this latest increased grant support is on the table.