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Homes in the UK have access to financial assistance from the government in the form of many subsidies that cover not only heat pumps but also other energy-saving and renewable technologies like solar panels and insulation
The following grants for heat pumps in the UK are either already available or will be later in 2022:
It is also possible to receive a free heat pump through specific incentives, such as Warmer Homes Scotland and the Nest Scheme in Wales, if you match the requirements. It’s crucial to keep in mind that funding for heat pumps is contingent upon availability because the same government funds also support other home renovation options. You should be aware that grants are awarded on a first-come, first-served basis. The majority of UK homeowners are qualified for at least one award, which is fantastic news.
Additionally, after the implementation of the VAT reduction on renewable energy technologies announced on March 23, 2022, you can now save more than £6,300. The reduction reduces the already low 5% VAT to an astounding 0%. View the most recent news below.
A recent announcement eliminated the VAT on heat pumps until 2027.Energy prices in April 2022 caused inflation in Europe to reach levels not seen in more than 40 years! Energy prices account for more than 40% of this inflationary rise.
The UK government announced a reduction of the current 5% VAT refund on energy-saving measures (such as solar panels, heat pumps) to 0% in order to aid homeowners in lowering energy costs and improving energy efficiency. Therefore, a typical household that instals rooftop solar panels will save £300 annually in energy bills in addition to over £1,000 in total installation costs.
The VAT-free time will finish and the rate will go back to 5% in March 2027. Compare solar panel costs to find the best deals if you want to get a head start before it’s too late.
To maximise your savings when combined with the available grant, gather quotes from certified heat pump installers in your area before applying for any government incentives. Then, compare those quotes.
Grants for ground- and air-source heat pumps have another important feature in that a similar incentive may be offered, say, in 2021 and 2022, under a different name and with modified requirements. This article will provide you a summary of all the heat pump grants that are offered in the UK.
In order to ensure that UK houses that care about the environment don’t lose out on new chances, this site will be often updated in accordance with the most recent government announcements.
While households in the UK are more interested in grants for air source heat pumps when it comes to funding for heat pumps, you shouldn’t rule out the potential of ground source heat pumps. The difference in interest can be ascribed to the latter’s greater apparent installation expenses when compared to an air source heat pump.
In the long run, however, a ground source heat pump might be the better choice because it can continue to draw heat from the ground throughout the winter, as opposed to an air source heat pump that might be hampered by low temperatures.
Having said that, installing an air source heat pump is eligible for funding because they are highly promoted in the UK moving forward.
Read our article on the differences between air source and ground source heat pumps to learn more about which type of heat pump is best for your home.
Government handouts are beneficial for three factors. First, if you satisfy the requirements, grants like the Nest Scheme in Wales may be able to provide you with a free air source heat pump. Additionally, through other programmes like the Home Energy Scotland Loan, you may be eligible to receive up to a 75% refund on certain renewable heating systems. The startup costs of heat pumps may be covered with the aid of such funds.
Second, you’ll pay less each year since heat pumps don’t burn energy to produce heat like gas boilers do; instead, they just transmit heat from one place to another.
A gas boiler only produces about 0.9 units of heat for every unit of energy, whereas a heat pump produces about 3 units of heat for every unit of energy. In comparison to a gas boiler, an air-source heat pump will save you, on average, £4,882 during its lifespan.
Compared to boilers, which have an average lifespan of just about 10 years, heat pumps have an efficiency lifespan of up to 20–25 years. This is partially due to the stiff architecture of heat pumps, which leaves less possibility for damage because they have few moving parts.
Two of the primary justifications given by the government for providing funds for heat pumps are listed below:
Net-zero emission target: In an effort to help people reach net-zero emission targets by 2035, the UK government is offering renewable energy incentives. The Paris Agreement, which seeks to keep global warming this century well below 2 degrees Celsius compared to pre-industrial levels, includes the UK along with 192 other nations.
In an effort to combat fuel poverty, the UK government has implemented heat pump financing. As a result of the gas price volatility around the world, the typical household’s energy bill is expected to rise by 33%, or £421, in October 2021. By providing people with heat pump grants, the UK can develop its own renewable energy industry that is independent of fossil fuels.
The government launched the Domestic RHI Scheme to reward homes that make the move to energy-efficient technologies like heat pumps in an effort to meet its net-zero emissions objective by 2035. Here, payments are made in the form of quarterly payments over a period of seven years for the amount of renewable energy the system generates.
For a detached home with three or more bedrooms during a seven-year period, for example, you might earn a heating allowance of up to £25,180 depending on the size of your home.
For the Domestic RHI Scheme to be available to you:
In April 2022, when the RHI Scheme expires, the Boiler Upgrade Scheme is anticipated to take its place.
You must act quickly if you want to take advantage of this programme because it will stop accepting new applications on March 31, 2022. Get quotations from up to four local heat pump installations before you take advantage of the RHI Scheme, then compare them to determine which one would work best with the grant to maximise your savings.
A £3.9 billion investment package was presented as part of the Heat and Buildings Strategy to aid in lowering domestic carbon emissions, and it includes the government’s boiler upgrade programme. Heat pumps, which are more environmentally friendly than natural gas boilers, can be purchased for UK houses with government funding.
From April 2022 to April 2025, the Boiler Upgrade Scheme will be in effect. It will replace the Domestic RHI Scheme, which on March 31, 2022, will stop accepting new applications.
The government will provide up to £5,000 in funding to homeowners for air source heat pumps. A voucher will be given to applicants, which must be used within three months. As a result, the heat pump has to be installed before the deadline.
All homeowners, small landlords, and private landlords are eligible for the incentive.
All applicants, however, must have a valid Energy Performance Certificate (EPC) with no outstanding loft or cavity wall insulation recommendations. Typically, this EPC was issued within the last 10 years.
If the installation of these types of insulation was finished during the validity period of the voucher, as shown by a freshly generated EPC at the voucher redemption stage, homeowners with outstanding recommendations for loft or cavity wall insulation may still apply.
The Scottish programme Warmer Homes offers UK households struggling to pay their energy bills and stay warm potential assistance for heat pumps in addition to other energy-efficiency incentives. Assessors will inspect your home to see whether converting to more affordable renewable heating systems like air source heat pumps will result in cost savings.
In most circumstances, the Scottish government will foot the entire bill. Keep in mind that financing cannot be acquired for previously finished projects. In some circumstances, more expensive improvements would need consumer contributions. You can obtain a loan with no interest to help with the costs of the consumer contribution.
If you satisfy all of the requirements listed below, you may be eligible for heat pump funding :
Get quotes from local heat pump installers, compare them, and decide which one would work best with the available subsidies to maximise your savings before applying for government grants.
The Scottish government’s project to end fuel poverty, Home Energy Scotland, is actually the larger programme that Warmer Homes Scotland is a part of. The programme provides interest-free loans to cover the upfront expenditures of renewable energy sources, including ground- and air-source heat pumps.
When you install renewable energy sources through this programme, you might receive up to £17,500 interest-free. Depending on the type of renewable system you select, you may also receive a payback of up to 75%.
You must satisfy the following requirements in order to be eligible for this programme:
If you qualify, the Welsh Government’s Nest Scheme offers a variety of free, unbiased guidance along with a package of free home energy efficiency upgrades including air source heat pumps. You can take advantage of air source heat pump funds offered by Nest, which are intended to lessen climate change, alleviate fuel poverty, and promote economic growth in Wales.
If you qualify, Nest may pay the full cost of your air source heat pump.
On March 31, 2021, the Green Homes Grant came to an end. If the applicant had a family member who received benefits, the voucher covered 100% of the expenses of the preferred upgrades up to £10,000 in total. The £5,000 grant voucher normally covered up to two-thirds of the cost of the selected renovations.
Although the demand for heat pumps is rising quickly in the UK, there are certain infrastructure-related worries. According to the Heat Pump Association (HPA), manufacturers got twice as many heat pump orders as normal in 2021 to keep up with the rising demand.
This is in accordance with Prime Minister Boris Johnson’s Ten Point Plan, which calls for the installation of 600,000 heat pumps throughout Britain by 2028. But given that just 35,000 pumps were sold in 2019 and the rumours surrounding the gas boiler ban, which is anticipated to go into place as early as 2023, the aim may be viewed as being unrealistic at this time.
On the plus side, energy retailer Octopus has said it will reduce the price of a heat pump that has been installed to £5,500 in the next 18 months. This might result in upfront expenses as low as £1,500, which would be less expensive than purchasing a new boiler starting in 2022 when combined with the boiler upgrade scheme.
According to experts, other manufacturers will recognise this problem and react, which will likely result in the kind of quick innovation and cost reduction witnessed in alternative energy, batteries, and electric vehicles. According to academic studies, the price of heat pumps decreases by a third every time the industry, which is now very small.
This indicates that domestically, the situation is changing and that smart homeowners have already begun to take advantage of funding opportunities before the government scales heat pump production and everyone starts to demand them.
Given the anticipated growth in the use of heat pumps in the UK, now is the ideal time for you to lock in government grants. The first step in doing this is to request quotes from local installers of heat pumps and then compare them to determine which one would pair best with the funding that is currently available. By doing this, you can maximise your savings, get the most value for your money, and help the environment at the same time.