Air source heat pump: government expands grants to pump tech that heats, cools - and cuts installation costs

• The Government has expanded the Boiler Upgrade Scheme to include air-to-air heat pumps that heat in winter and cool in summer
• Households can now claim a £2,500 grant, covering over half the cost of installing a small or flat-sized system
• Heat batteries storing off-peak electricity are also eligible for a £2,500 grant, helping reduce energy bills further
• The scheme targets flats and small homes where central heating retrofits can be difficult or costly
• Experts say the expansion encourages electric heating adoption, cutting reliance on gas and future-proofing homes

A government shake-up of green home grants could make it dramatically cheaper for households to stay warm in winter and cool in summer, without relying on pricey gas or clunky portable air con units.

Ministers have expanded the Boiler Upgrade Scheme to cover air-to-air heat pumps, a type of clean tech that works as a heater in the colder months and an air-conditioner during heatwaves.

For the first time, households will be able to claim a £2,500 discount on installation; with the average system in a flat or small house costing around £4,500, the new grant covers more than half the upfront cost.

The move comes as the UK edges closer to mainstream adoption of heat pumps, with installations hitting record highs. But it also lands against a backdrop of anxiety that subsidies could be narrowed in the Chancellor’s upcoming Budget.

Expanding, rather than restricting, the scheme seems to suggest that ministers may be sticking with the switch to electric heating after all.

Air-to-air heat pumps sit alongside the existing grants of £7,500 for air-source and ground-source heat pumps, which replace boilers entirely.

Officials say the newer option will appeal particularly to people in smaller homes or flats that lack central heating, where a full retrofit can be too invasive or expensive.

The update also introduces £2,500 grants for heat batteries, which store heat generated overnight when electricity tariffs are cheaper. In practice, this could help households cut bills further by shifting energy use away from peak hours.

Martin McCluskey, minister for energy consumers, said the technology “offers the best of both worlds”, giving households year-round comfort and more choice when upgrading.

He added that the Government is now consulting on how wider clean-heating innovations, including thermal storage, infrared panels and renewable fuels, could fit into the UK’s future energy mix.

Energy analysts say expanding the scheme is not just about comfort or cost, and Jess Ralston, of the Energy and Climate Intelligence Unit, warned that without a large-scale shift to electric heating, the UK will grow more dependent on foreign gas as North Sea production declines.

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How to find out more and get a heat pump installed

If you’re considering a heat pump or heat battery, it’s important to know where to get trustworthy information and how the installation process works.

The Boiler Upgrade Scheme is administered by Ofgem, and full details are available on GOV.UK. The site explains eligibility, how much you could get, and the types of systems covered.

The Energy Saving Trust also offers a clear, consumer-friendly guide to the scheme and its benefits.

Installation must be carried out by a Microgeneration Certification Scheme (MCS) certified installer, who will apply for the grant on your behalf.

Most grants are “installer-led,” meaning you don’t apply directly; instead, the installer claims the discount and applies it to the upfront cost. This helps simplify the process and ensures the system meets quality and safety standards.

Before contacting an installer, check your property’s Energy Performance Certificate (EPC) and confirm what type of heating you’re replacing (gas, oil, or LPG).

Ask your installer for a full quote that includes the grant discount and clarify the timeframe: most systems must be commissioned within 120 days of the grant application.

Even if you live in a flat or smaller home, certified installers can advise on whether an air-to-air heat pump, heat battery, or other low-impact system is the best fit.

Getting multiple quotes is recommended to ensure you’re getting the right system for your home and the best value for money.

By following these steps, you can make the most of the £2,500 heat pump discount or the £2,500 heat battery grant, potentially cutting your heating bills while future-proofing your home for both winter warmth and summer cooling.