Air Source Heat Pump Grant: Get Up to £7,500 or 100% Free
UK homeowners can get an air source heat pump through two government grants in 2026: the Boiler Upgrade Scheme (£7,500 off) for any homeowner, or ECO4 (100% free) for households on qualifying benefits. Over 98,000 heat pumps were sold across the UK in 2024 alone (GOV.UK).
Key Takeaway
There are two ways to get an air source heat pump grant in the UK in 2026. The Boiler Upgrade Scheme gives any homeowner £7,500 towards installation (extended to 2030). If you receive qualifying benefits like Universal Credit or Pension Credit, ECO4 covers the full cost at zero expense — but closes December 2026. A third option, the Warm Homes: Local Grant, offers up to £30,000 for low-income households.
In This Guide
Two Routes to a Heat Pump Grant in 2026
The UK government offers two distinct pathways to fund your air source heat pump. Your eligibility depends on your income and benefits status.
£7,500 grant · No income test
- No income restrictions — any homeowner qualifies
- England & Wales, replacing fossil fuel heating
- Extended to 2030 (Ofgem)
- Must use MCS-certified installer
- 0% VAT until March 2027
You pay: ~£2,500–£5,500 after grant
Check BUS EligibilityFully funded · Closes Dec 2026
- Receiving UC, Pension Credit, ESA, JSA, PIP, or Child Tax Credit
- Or income under £31,000 via LA Flex
- EPC rating D, E, F, or G (GOV.UK)
- Covers ASHP + radiators + insulation
- Deadline: December 2026 — apply now
You pay: absolutely nothing
Apply for Free Heat PumpBoiler Upgrade Scheme: £7,500 for Any Homeowner
The BUS is a government grant administered by Ofgem that provides £7,500 towards air source or ground source heat pump installation. Unlike ECO4, there are no income restrictions — any homeowner in England or Wales can apply. The scheme was originally due to end in 2025 but has been extended to 2030 with an annual budget of £295 million for 2025/2026.
BUS Eligibility Requirements
You Must:
- Own the property (homeowner or landlord)
- Be in England or Wales
- Replace fossil fuel heating (gas, oil, LPG, coal)
- Have a valid EPC (within last 10 years)
- Use an MCS-certified installer
You Cannot:
- Have received a previous BUS grant
- Apply as a tenant (landlords only)
- Be in Scotland (separate scheme)
- Apply for a new-build property
| Technology | BUS Grant | Typical Cost | You Pay |
|---|---|---|---|
| Air Source Heat Pump (air-to-water) | £7,500 | £10,000–£13,000 | £2,500–£5,500 |
| Ground Source Heat Pump | £7,500 | £15,000–£35,000 | £7,500–£27,500 |
| Biomass Boiler (off-gas rural only) | £5,000 | £10,000–£20,000 | £5,000–£15,000 |
| Air-to-Air Heat Pump (coming 2026) | £2,500 | £5,000–£8,000 | £2,500–£5,500 |
Source: Ofgem BUS. Costs exclude VAT (currently 0% on heat pumps until March 2027). Prices vary by property size and installer.
ECO4: Get a Free Heat Pump (Benefits Recipients)
The Energy Company Obligation (ECO4) funds 100% of the cost of an air source heat pump for eligible households. This is the best route if you receive qualifying benefits or earn under £31,000 through LA Flex. ECO4 has been extended to December 2026 (GOV.UK), but there is no confirmed successor for this level of funding.
Qualifying Benefits for a Free Heat Pump
Not on benefits? You may still qualify via LA Flex if your household income is under £31,000 or you have a health condition worsened by cold housing.
| Feature | ECO4 (Free Route) | BUS (£7,500 Grant) |
|---|---|---|
| Your Cost | £0 — fully funded | £2,500–£5,500 after grant |
| Income Test? | Yes — benefits or <£31k | No — any homeowner |
| What's Covered | ASHP + insulation + radiators | Heat pump only |
| Deadline | December 2026 | Extended to 2030 |
| Property Type | EPC D–G, homeowners & tenants | Any EPC, homeowners only |
| Installer | Arranged by energy supplier | You choose (MCS-certified) |
NEW: Warm Homes Local Grant (Up to £30,000)
Launched April 2025, this scheme provides up to £15,000 for a low-carbon heating system plus £15,000 for insulation — a total of £30,000 per household with no contribution required (GOV.UK). Available for households earning under £36,000 or on means-tested benefits, in England only, with EPC D–G rated homes. Contact your local authority to apply.
Heat Pump vs Gas Boiler: Running Costs in 2026
One of the biggest questions homeowners ask is whether a heat pump is cheaper to run than gas. Here are the real numbers based on Ofgem's Q1 2026 price cap and real-world fleet data from Octopus Energy.
| Factor | Air Source Heat Pump | Gas Boiler |
|---|---|---|
| Efficiency | 300–400% (COP 3.0–4.0) | 90–92% |
| Annual Heating Cost | ~£840/year | ~£835/year |
| With Heat Pump Tariff | Save £219/year extra | N/A |
| Lifespan | 20–25 years | 10–15 years |
| Annual Maintenance | £100–£200 | £80–£150 |
| CO₂ Emissions | ~70% less than gas | ~2.2 tonnes CO₂/year |
| 20-Year Total Saving | ~£3,900 saved vs gas | Baseline |
Bottom line: At standard Ofgem rates, running costs are near parity. But with a dedicated heat pump tariff (like Octopus Cosy), customers save an average £219/year compared to gas. Over the 20-year lifespan of a heat pump, that adds up to ~£3,900 in savings — and you'll never need to replace a gas boiler again. Gas prices are also expected to rise as UK imports increase, while electricity costs are falling with more renewable generation.
Savings If You're Replacing Oil or LPG
Replacing Old Gas Boiler
Save £100–£280
per year (with HP tariff)
Replacing Oil Heating
Save £400–£700
per year
Replacing LPG Heating
Save £800–£1,200
per year
How Air Source Heat Pumps Work
An ASHP extracts heat from outdoor air — even at temperatures as low as -25°C — and compresses it to heat your home and water. Real-world data from Octopus Energy's fleet of UK heat pumps shows an average COP (Coefficient of Performance) of 3.87, meaning for every 1 kWh of electricity used, the pump produces 3.87 kWh of heat (Octopus Energy).
1. Absorb
Fan draws air over a refrigerant-filled evaporator
2. Compress
Compressor raises the refrigerant temperature to 55–65°C
3. Heat
Heat exchanger transfers warmth to your radiators or underfloor system
4. Repeat
Refrigerant cools and cycles back to absorb more heat
Key ASHP Advantages Over Gas Boilers
3–4x More Efficient
COP of 3.87 means 387% efficiency vs 92% for gas
Works in All UK Weather
Operates down to -25°C — handles every UK winter
Heating & Hot Water
One unit replaces your boiler for both heating and hot water
Low Maintenance
Annual service costs £100–£200, no Gas Safe requirements
20–25 Year Lifespan
Nearly double the 10–15 year lifespan of a gas boiler
Future-Proof
Ready for the UK's net zero 2050 target — no gas dependency
UK Heat Pump Growth (2024–2026)
98,345
Heat pumps sold in 2024
+56%
Growth vs 2023
99%
Of retrofits are ASHPs
450k
Target per year by 2030
How to Get Your Heat Pump Grant: Step by Step
Check Your Eligibility (60 Seconds)
Use our free eligibility checker to see which grant route suits you — BUS, ECO4, or both. We'll need your postcode, benefits status, and current heating type.
Check Eligibility NowFree Home Survey
An MCS-certified surveyor visits your home to assess suitability, measure heat loss, and recommend the right ASHP size. This is completely free and no-obligation.
Grant Application
For BUS, your installer applies to Ofgem on your behalf. For ECO4, we handle the entire application through the energy supplier. No paperwork for you.
Professional Installation (1–3 Days)
MCS-certified engineers install your air source heat pump, connect it to your heating system, and commission the unit. Most installations take 1–3 days.
Enjoy Lower Bills & Zero Carbon Heating
Your new ASHP starts saving money from day one. We provide a full handover, user guide, and ongoing support. Your system is covered by manufacturer warranty.
Frequently Asked Questions
Common questions about air source heat pump grants in the UK.
How much is the air source heat pump grant in 2026?
The BUS grant provides £7,500 towards an ASHP for any homeowner in England or Wales. ECO4 covers the full cost for benefits recipients with EPC D-G rated homes. (Source: GOV.UK)
Can I get a free heat pump on Universal Credit?
Yes. Universal Credit recipients qualify for a fully-funded ASHP through ECO4, covering installation and equipment at zero cost. Apply before ECO4 closes December 2026. (Source: Ofgem)
How much does a heat pump cost after the BUS grant?
Typical ASHP installation costs £10,000–£13,000. After the £7,500 BUS grant and 0% VAT, homeowners pay roughly £2,500–£5,500. (Source: MCS/Ofgem)
Are heat pumps cheaper to run than gas boilers?
Running costs are near parity at standard rates — roughly £840/year for an ASHP vs £835 for gas. Heat pump tariffs can save £219/year extra. (Source: Octopus Energy)
Do heat pumps work in cold UK weather?
Yes. Modern ASHPs operate down to -25°C. Real-world UK fleet data shows an average COP of 3.87, meaning 3.87 kWh of heat per 1 kWh of electricity. (Source: Octopus Energy)
How long do air source heat pumps last?
ASHPs have a lifespan of 20–25 years, nearly double the 10–15 years of a gas boiler. Annual maintenance costs £100–£200. (Source: Energy Saving Trust)
What is the Warm Homes Local Grant for heat pumps?
A new scheme offering up to £15,000 for low-carbon heating plus £15,000 for insulation (£30,000 total). For households earning under £36,000. Runs until March 2028. (Source: GOV.UK)
Do I need planning permission for a heat pump?
Most ASHPs fall under permitted development rights — no planning permission needed. The unit must be at least 1 metre from the property boundary. (Source: Planning Portal)
Ready to Get Your Heat Pump Grant?
Whether you qualify for a 100% free heat pump through ECO4 or £7,500 off through BUS, our team has helped 7,000+ UK households upgrade their heating. Check your eligibility in 60 seconds.
Written by Peter Davies, ECO4 Analyst
10+ years in UK energy efficiency. Specialist in government grant programs and home energy improvements.
Last Updated: March 2026
Reviewed monthly · ECO4 Scheme Guide