Heat Pump Grant UK 2026: BUS, ECO4 & Costs

What grants are available for heat pumps?

Two government-backed routes can reduce or remove the cost of a heat pump.

The Boiler Upgrade Scheme (BUS) covers England and Wales. Since 21 July 2026 the approved grant values are:

The extra £1,500 uplift for off-gas-grid properties replacing oil or LPG boilers is available until March 2027. Fossil-fuel hybrid systems do not qualify as the new installation. BUS funding is confirmed through the 2029/30 fiscal year under the Warm Homes Plan (GOV.UK BUS funding commitment).

ECO4 is the Energy Company Obligation, running until 31 December 2026. It can fully fund a heat pump for qualifying low-income households, but eligibility depends on your home's tenure, EPC rating, household income and the measures an energy supplier's assessor recommends. ECO4 is not an automatic entitlement for everyone receiving benefits (GOV.UK ECO).

Scotland has separate support programmes and is not covered by BUS. If you live in Scotland, check Energy Grants Scotland for current options.

Who is eligible for the BUS grant?

Eligibility centres on the property, not just the person paying.

To qualify for BUS you must:

• Own the property (including if you are a landlord, but most new-build homes and social housing are excluded).
• Be replacing an existing heating system. The installer must check the existing heating against the eligibility rules, including any applicable self-build provisions.
• Use an MCS-certified installer who applies on your behalf.
• Have the heat pump commissioned and installed within 120 days of the application.

BUS no longer requires you to complete outstanding loft or cavity-wall insulation recommendations before applying. That requirement was removed on 8 May 2024. Insulating first is still sensible because a well-insulated home lets a smaller, cheaper heat pump do the job, but it is not a grant condition (GOV.UK BUS eligibility).

Who is eligible for ECO4?

ECO4 eligibility is not automatic for every benefit claimant.

The scheme targets low-income and fuel-poor households. Key factors include:

• Benefits: certain means-tested benefits can qualify you, but Child Tax Credit and Working Tax Credit ended on 5 April 2025 and are no longer valid qualifying benefits.
• ECO Flex: your local council can refer households that do not receive qualifying benefits but meet local vulnerability or low-income criteria. This is a referral route, not guaranteed funding.
• EPC rating: for private rented homes, GOV.UK specifies EPC E, F or G. Owner-occupiers may qualify with a wider range of ratings depending on the supplier's assessment.
• Measures: the energy company's assessor decides which improvements are funded. A heat pump is not guaranteed; the package depends on your home's characteristics.

ECO4 closes on 31 December 2026.

How much does a heat pump cost after the grant?

The amount you pay depends on the system, your home and which grant you receive.

No two installations cost the same. Heat pump pricing varies with system size, the complexity of pipework and radiator changes, and whether you need a hot-water cylinder. The following is a clearly illustrative budgeting example, not a market quote.

Assumptions for this example:

• A three-bedroom semi-detached house in England on the gas grid.
• An air-to-water heat pump system with a new hot-water cylinder.
• Hypothetical total installed cost of £12,000 (chosen as a round figure for illustration; actual quotes will differ).

If the same home were off the gas grid and replacing an oil boiler, the grant would be £9,000 (until March 2027), reducing the hypothetical homeowner cost to £3,000.

For an ECO4-funded installation, the household may pay nothing if the energy company covers the full cost, but this is assessed case by case.

Installed energy-saving materials, including heat pumps, currently attract zero-rate VAT through 31 March 2027, after which the rate is scheduled to rise to 5%. This applies to professionally installed systems, not supply-only purchases (HMRC rules for qualifying installed energy-saving materials).

Always get at least three quotes from MCS-certified installers. For the same eligible grant category, compare the total installation price and all exclusions. Financing, maintenance and any additional work also affect the overall cost.

How do you apply for the BUS grant?

Your MCS-certified installer applies on your behalf.

The process works like this:

1. Get quotes. Contact MCS-certified heat pump installers and compare at least three written quotes.
2. Choose an installer. Confirm they are MCS-certified for the type of heat pump you want.
3. Installer applies. They submit the BUS application through the Ofgem portal, including your property details and the proposed system.
4. Voucher issued. If approved, a voucher is issued. The heat pump must be commissioned and installed within 120 days.
5. Grant paid. The grant is paid to the installer, who deducts it from your bill. You pay only the remaining balance.

You do not need to apply to the government yourself. The installer handles the paperwork. If you are exploring ECO4, contact your energy supplier or ask your local council about ECO Flex referrals.

Why does MCS certification matter?

MCS certification is a legal requirement for BUS funding.

The Microgeneration Certification Scheme sets standards for renewable-energy installations. Only an MCS-certified installer can apply for a BUS voucher. Using a non-certified installer means you cannot claim the grant, regardless of the equipment fitted.

MCS certification also matters because:

• It requires the installer to follow defined design and installation standards.
• It provides a consumer code and complaints process.
• It provides evidence that the installation has followed the applicable certification process. VAT relief has separate conditions and is not established simply by MCS status.

You can search the MCS installer database on the MCS website to verify any company before signing a contract.

What about the Warm Homes Local Grant?

This is a separate England-only scheme for lower-income households.

The Warm Homes Local Grant targets private homes rated EPC D to G, usually where household income is at most £36,000. Qualifying benefits or postcodes can provide alternative routes. A council survey determines which improvements are funded, and a heat pump may be included if appropriate. A national GOV.UK application portal exists, but available funding and the specific measures offered depend on your local authority. Landlords may need to contribute. Funding delivery runs to March 2028.

What should you watch for with scams?

Pressure selling and fake grant claims are common in the energy sector.

Protect yourself by following these steps:

• Verify MCS certification directly on the MCS website before agreeing to any work.
• Check payment terms. The installer handles the BUS application. Any deposit or charge for the installation should be explained in the contract, with clear arrangements if funding is refused.
• Be wary of cold callers promising free heat pumps. ECO4 can fund a heat pump, but eligibility is assessed, not guaranteed by a phone call.
• Get written quotes that itemise the equipment, labour and any additional work such as radiator upgrades.
• Check Companies House and reviews for any installer you are considering.

Eco's eligibility checker indicates possible routes based on your answers, but it does not confirm or approve a grant. Final eligibility is determined by the installer (for BUS) or the energy company and council (for ECO4).

What if you do not qualify for a grant?

You can still consider a heat pump, but lower running costs are not guaranteed.

If you fall outside BUS and ECO4 eligibility, consider:

• Zero-VAT installation still applies through 31 March 2027 on professionally installed heat pumps, subject to the relief’s conditions.
• Spreading the cost. Some installers offer payment plans, and green finance products are available from several lenders.
• Starting with insulation. Improving your home's thermal performance first, such as loft insulation, reduces the size and cost of the heat pump you need.
• Checking again later. BUS funding is confirmed through 2029/30, and new schemes may open. ECO4 ends in December 2026, but successor programmes are possible.

A heat pump sized correctly for a well-insulated home can reduce heating bills compared with an older gas or oil boiler, even without grant support. The Energy Saving Trust provides a useful overview of air-source heat pump performance and suitability.

Before signing, request the heat-loss calculation, proposed flow temperature and hot-water specification. Check whether the quote covers radiator changes, electrical work, removal of the old equipment and making good. Ask who will handle servicing and any warranty claim. These practical details can change the value of two quotes even where the headline grant is identical. Keep a copy of the contract and grant confirmation for your records.