Thousands more households can get £7,500 to improve their home and slash bills

The Government has confirmed additional funding, allowing thousands more households to receive a free £7,500 grant towards the cost of a heat pump. The Department for Energy Security and Net Zero (DESNZ) has pledged an extra £30 million this financial year for its Boiler Upgrade Scheme, part of the broader Warm Homes Plan.

The budget is set to nearly double next financial year to £295 million. Furthermore, the Government plans to alter planning rules requiring heat pumps to be at least one metre from the property boundary.

This change comes after Octopus Energy revealed that 34% of customers who order a heat pump cancel or are deterred due to planning permission issues. Officials have announced around £3.2 billion in funding for warmer homes in 2025/26, which will assist approximately 300,000 households.

Heat pumps, often described as "like a fridge in reverse" are being widely considered as replacements for gas boilers. They extract energy from the air, ground, or water and transfer the heat where needed.

The Government stated that when used effectively with a smart "time of use" electricity tariff, heat pumps could save around £100 a year compared to a gas boiler, while better insulation could reduce bills by about £200 a year, reports the Mirror.

Installing environmentally-friendly heating systems comes with a steep initial cost. The Energy Saving Trust approximates the installation of an air source heat pump can be between £14,000 to £19,000, while setting up a ground source heat pump may run from £28,000 to £34,000.

However, Minister for energy consumers Miatta Fahnbulleh spoke on the benefits of greener heating, "The idea at the heart of our Warm Homes Plan is a simple one – all families deserve the security of a home they can afford to heat. But for too long, that has been out of reach for far too many people who have been left with draughty homes and sky-high bills. That is why we are taking immediate action today to make cleaner heating available to more households."

For those looking into the Boiler Upgrade Scheme, requirements include living in England or Wales, owning the property, and replacing a fossil fuel heating system with eligible alternatives accompanied by a valid Energy Performance Certificate (EPC). Eligible recipients could receive up to £7,500 for both types of heat pumps or £5,000 towards a biomass boiler.

This grant doesn't need to be repaid. Interested homeowners must approach an MCS-certified installer, who will claim the grant on their behalf; it's advisable to compare quotes for the best deal via the MCS website.

After agreeing on a price, the installer will apply for the grant on your behalf. Subsequently, Ofgem will contact you to confirm that the work is being carried out.

It's crucial to note that your new heat pump must be installed within 120 days of applying for the grant; otherwise, the grant will become invalid.