A typical air source heat pump installation costs around £12,000, and in England and Wales the Boiler Upgrade Scheme takes £7,500 off that, leaving roughly £4,500 to find. If your home is off the mains gas grid and heated by oil or LPG, the grant is £9,000 rather than £7,500 until 31 March 2027, which takes the same job down to about £3,000. Both figures were checked on gov.uk and Ofgem on 5 October 2026, and the £12,000 is the Energy Saving Trust's own typical cost, on a page it last updated on 23 September 2026. The rest of this guide is where that money goes, who is eligible, and what the heat pump then costs to run against the boiler you took out.
What a heat pump costs before any grant
The Energy Saving Trust puts the typical cost of installing an air source heat pump at around £12,000. That is the figure on its air source heat pump guide, which carries a "last updated" date of 23 September 2026.
EST names four things that move the price:
- the size of the heat pump, which is set by how much heat your home loses, not by how many bedrooms it has
- the size of the property
- whether it is a new build or an existing home
- whether your radiators need upgrading
The brand on the quote moves the equipment cost too, and not always in the direction the marketing implies. Our guide to Vaillant heat pumps in the UK works through one example in detail: the aroTHERM plus outdoor unit is around £4,200 including VAT, the same unit with a Vaillant cylinder tower is £7,545.60, and the three different warranty terms Vaillant publishes for it all depend on conditions your installer controls rather than on the heat pump.
The radiator question is the one that catches people out. A heat pump runs water round your house at a far lower temperature than a gas boiler does, so each radiator has to be bigger to give out the same heat. A quote that includes six new radiators and a hot water cylinder is not a quote that has been padded. It is a quote that has been surveyed. A quote that includes none of that, on a 1930s semi with small panel radiators, has probably not been surveyed at all. MCS publishes the sizing factors that decide which of your radiators are already big enough, and we go through them in our guide to radiators and heat pumps.
You will also need somewhere to put hot water. EST is blunt about it: a standard air source heat pump does not make hot water on demand the way a combi boiler does, so you need a cylinder. One usually fits in any cupboard measuring at least 80cm by 80cm. If you genuinely have nowhere, the alternatives are a heat battery, a hybrid system where a boiler still does the hot water, or instantaneous heaters under the sink.
What the Boiler Upgrade Scheme takes off, in England and Wales
The Boiler Upgrade Scheme pays £7,500 towards an air source heat pump and £7,500 towards a ground source heat pump, and it is open to people in England and Wales only. Read live on gov.uk and the Ofgem scheme page on 5 October 2026:
| What you install | Grant | Notes |
|---|---|---|
| Air source heat pump (air-to-water) | £7,500 | The common domestic choice |
| Ground source heat pump | £7,500 | Includes water source and shared ground loops |
| Air-to-water or ground source, eligible off-gas-grid property | £9,000 | Ofgem's wording. Available until 31 March 2027 |
| Air-to-air heat pump | £2,500 | Residential properties only |
| Biomass boiler | £5,000 | Off the gas grid, rural, emissions certificate required |
The £9,000 and the £7,500 are the same grant counted two ways, and it is worth understanding which one your installer means. Gov.uk frames it as the £7,500 plus "an additional £1,500 towards an air source heat pump or ground source heat pump" where your property is heated by oil or LPG and has no mains gas connection, available until March 2027. Ofgem's page states the combined figure directly as "£9,000 off the cost and installation of air-to-water or ground source heat pumps in eligible off-gas grid properties", also to 31 March 2027. Same money, same deadline, two ways of writing it down.
Who can get it
Gov.uk sets two conditions, and both have to be true. You must own the property, which includes a business premises, a second home or a property you rent to tenants, and you must be replacing a fossil fuel heating system: oil, gas, electric or LPG. Having already taken funding for insulation does not disqualify you.
Four details decide most real applications:
- One grant per property. Not one per heat pump, and not one per owner.
- No hybrids. Gov.uk is explicit that a combination of gas boiler and air source heat pump does not qualify.
- No swapping like for like. You cannot use the grant to replace a low carbon heating system you already have. It exists to get fossil fuel heating out.
- 120 days. Your installer has to commission and install the heat pump within 120 days of applying for the grant, or it stops being eligible.
There are capacity limits too: 45kWth for an individual system, 70kWth where a heat pump goes in alongside one or more others, and 300kWth for shared ground loops. A domestic install is nowhere near any of those.
Who cannot
Gov.uk excludes most new build properties, social housing, and any property that has already had government funding or support for a heat pump or biomass boiler. A new build the developer is still building is out. If you move into a finished new build that came with a fossil fuel boiler, you may be able to claim. Self builds are eligible if you or the original owner built it and it has never been owned by a business.
You do not apply. Your installer does.
The Boiler Upgrade Scheme is installer-led: MCS certified installers apply for and redeem the vouchers on the property owner's behalf. That is Ofgem's own description of the scheme, and it has a practical consequence. The grant is not a cheque that arrives later, it is money taken off the price before you pay, and it is only available through an installer certified by the Microgeneration Certification Scheme. An uncertified installer cannot access the £7,500 at all, however good their price looks. EST recommends getting quotes from at least three MCS certified installers.
Price a heat pump for your own home
National averages only go so far. Tell us about your home once and we will pass your details to MCS-certified installers covering your postcode, so you get itemised quotes with the grant shown as a separate line.
Scotland and Northern Ireland do not use the Boiler Upgrade Scheme
In Scotland the equivalent is the Home Energy Scotland Grant and Loan: up to £7,500 as a grant for a heat pump, plus an optional interest-free loan of a further £7,500. Checked on homeenergyscotland.org on 5 October 2026. Rural and island homes get a £1,500 uplift on both the heating grant and the energy efficiency grant, which is how Home Energy Scotland arrives at its headline figure of up to £18,000 in grant funding. Read that £18,000 carefully: it is the ceiling across every measure a rural household might take, insulation included, not what a heat pump on its own attracts.
Three conditions are worth knowing before you count on it. It is not means tested, so you do not need to be on benefits. Only heat pumps that provide 100% of your heating and hot water are eligible, and hybrids are not. And a heat pump replacing an existing heat pump gets loan funding only, up to £7,500, with no grant. As in England and Wales, you need an MCS certified installer and an MCS or Solar Keymark certified product.
In Northern Ireland the Boiler Replacement Scheme has closed, and gov.uk now points Northern Irish households to local energy saving grants instead. EST's position is the same: there is no specific heat pump grant in Northern Ireland at the moment, though insulation funding is available through NI Energy Advice. If you are in Northern Ireland, budget the full cost.
VAT is 0% until 31 March 2027, then 5%
Installing a heat pump currently carries 0% VAT, and that zero rate ends on 31 March 2027. HMRC's VAT Notice 708/6 states that the notice "covers supplies of installations of energy-saving materials made between 1 May 2023 and 31 March 2027", and that "from 1 April 2027 onwards, supplies of installations of energy-saving materials will revert to the reduced rate of VAT of 5%". Read live on gov.uk on 5 October 2026.
Note the destination rate. It is 5%, not 20%. A lot of installer marketing implies a cliff edge at the standard rate, and that is not what the legislation says. On a £12,000 job the difference between 0% and 5% is around £600, which matters but is not the £2,400 some sales copy implies. The same zero rate, and the same end date, applies to solar panels and home batteries. We cover that in detail in our guide to VAT on solar panels in the UK.
What a heat pump costs to run against a gas boiler
On the energy price cap in force for 1 October to 31 December 2026, a heat pump needs a seasonal efficiency of roughly 3.0 to match the running cost of a 90% efficient gas boiler. Ofgem's published cap rates for that period, Direct Debit, Great Britain average, are electricity at 26.32p per kWh with a 54.83p daily standing charge, and gas at 7.97p per kWh with a 29.68p daily standing charge.
Work it through per unit of heat delivered into the house:
- Gas boiler at 90% efficiency: 7.97p divided by 0.9 is 8.9p per kWh of heat.
- Heat pump at a seasonal performance factor of 2.5: 26.32p divided by 2.5 is 10.5p. Worse.
- At 3.0: 26.32p divided by 3.0 is 8.8p. Line ball.
- At 3.5: 26.32p divided by 3.5 is 7.5p. Around 15% cheaper.
So the whole running cost argument sits on the efficiency your installed system actually achieves across a British winter, not on the efficiency printed on the box. That number is decided by flow temperature, which is decided by radiator sizing, which is decided by whether anybody did a proper room-by-room heat loss survey. This is the single reason a cheap quote can be the expensive one.
Two things change the arithmetic in your favour, and one against it.
In your favour: if you disconnect the gas supply entirely, you stop paying the gas standing charge, which at 29.68p a day is £108 a year whether you burn anything or not. And EST's research is that switching to a heat pump time-of-use tariff can cut running costs enough that a heat pump costs less to run than a gas boiler, because it shifts the heavy electricity use into cheaper hours. On a standard tariff, EST notes, electricity is close to four times the price of gas and a heat pump can cost slightly more to run than a new gas or oil boiler.
Against it: there is currently no VAT on domestic electricity in Great Britain from 1 October 2026 to 31 March 2027, while gas still carries 5%. Ofgem flags on its own rates page that the periods therefore cannot be compared directly. When electricity VAT returns on 1 April 2027, the electricity side of the sum above gets worse, and the break-even efficiency rises with it. Treat today's comparison as a snapshot of one cap period, not a fifteen-year forecast. Our guide to the cost of electricity per kWh in the UK tracks the rate itself. The full side-by-side comparison, including the break-even efficiency for each boiler band and what the grant does to the upfront gap, is on our heat pump vs gas boiler page.
The honest version of the sum
Put the three numbers together for a typical English semi replacing a gas boiler, using the figures above:
| Line | On the gas grid | Off the gas grid, oil or LPG |
|---|---|---|
| Typical install (EST) | £12,000 | £12,000 |
| Boiler Upgrade Scheme | minus £7,500 | minus £9,000 |
| VAT at 0% to 31 March 2027 | £0 | £0 |
| You pay, roughly | £4,500 | £3,000 |
That is England and Wales. In Scotland the £7,500 grant lands in the same place, with up to £7,500 of interest-free loan on top of it if you want to spread the remainder. In Northern Ireland the £12,000 is the number.
What this sum does not tell you is whether £4,500 is a good deal in your house, because the £12,000 is a national average and your home is not average. A well insulated 1990s detached with big radiators already fitted can come in below it. A solid-walled Victorian terrace that needs every radiator changed and has nowhere obvious for a cylinder will not. Only a survey settles it.
Where solar fits
A heat pump runs on electricity, which is the expensive fuel in the sum above, so the obvious question is whether generating some of it yourself changes the answer. EST published research in 2026 finding that combining heat pumps, solar panels and batteries with time-of-use tariffs achieves substantial bill savings, and that heat pumps can offer some of the shortest payback periods where they replace a gas boiler under the right conditions.
The catch is seasonal. A heat pump's demand peaks in December and January, which is exactly when a British solar array produces least. Solar will not run your heating in midwinter. What it does do is carry the shoulder months and the hot water, and a battery lets you buy winter electricity in the cheap overnight window rather than at the 26.32p daytime rate. If you are weighing both, start with our guides to solar panel costs in the UK and solar battery storage, and note that the same 0% VAT deadline of 31 March 2027 applies to all three technologies.
On grants, the opposite is true: there is no universal UK grant for solar panels the way there is for heat pumps. Our guide to solar panel grants in the UK sets out what does and does not exist.
Frequently asked questions
Around £12,000 to install, before any grant. That is the Energy Saving Trust's typical figure, on a page last updated on 23 September 2026. In England and Wales the Boiler Upgrade Scheme takes £7,500 off, so you pay roughly £4,500. If your home is off the mains gas grid and heated by oil or LPG, the grant is £9,000 until 31 March 2027, so you pay roughly £3,000. The cost varies with the size of the heat pump, the size of your property, whether it is a new build, and whether your radiators need upgrading, and that last item is the one that moves real quotes the most.
£7,500 towards an air source heat pump and £7,500 towards a ground source heat pump, read live on gov.uk on 5 October 2026. Biomass boilers get £5,000 and air-to-air heat pumps get £2,500, the latter for residential properties only. Where the property is heated by oil or LPG with no mains gas connection, there is an additional £1,500, which Ofgem states as a combined £9,000, available until 31 March 2027. You can get one grant per property, and hybrid heat pump systems combining a gas boiler with a heat pump are not eligible.
No. Gov.uk states the Boiler Upgrade Scheme "is open to people in England and Wales". In Scotland the equivalent is the Home Energy Scotland Grant and Loan, which gives up to £7,500 as a grant for a heat pump plus an optional interest-free loan of a further £7,500, with a £1,500 uplift for rural and island homes. It is not means tested, but only heat pumps providing 100% of heating and hot water qualify, and a heat pump replacing an existing heat pump gets loan funding only. In Northern Ireland the Boiler Replacement Scheme has closed and there is no specific heat pump grant at present.
No, your installer does. Ofgem describes the scheme as installer-led: MCS certified installers apply for and redeem Boiler Upgrade Scheme vouchers on behalf of property owners. The money comes off the price rather than arriving as a payment to you. This means an installer who is not MCS certified cannot access the £7,500 at all, whatever their quote says. Once applied for, the installer has 120 days to commission and install the heat pump or the grant stops being eligible.
It depends on the efficiency your system actually achieves. On the Ofgem price cap for 1 October to 31 December 2026, electricity is 26.32p per kWh and gas is 7.97p per kWh for Direct Debit customers in Great Britain. A 90% efficient gas boiler therefore delivers heat at about 8.9p per kWh. A heat pump matches that at a seasonal efficiency of about 3.0, beats it at 3.5 (7.5p), and loses at 2.5 (10.5p). Two things help: disconnecting the gas supply saves the 29.68p daily standing charge, which is £108 a year, and the Energy Saving Trust's research finds a heat pump time-of-use tariff can bring running costs below a gas boiler. One thing hurts: electricity currently carries 0% VAT in Great Britain only until 31 March 2027.
Possibly, and it is one of the four things the Energy Saving Trust names as moving the installation cost. A heat pump circulates water at a much lower temperature than a gas boiler, so each radiator has to be larger to deliver the same heat into the room. Whether yours need changing is settled by a room-by-room heat loss survey, not by a rule of thumb. This matters beyond the upfront bill: undersized radiators force a higher flow temperature, a higher flow temperature cuts the seasonal efficiency, and the seasonal efficiency is what decides whether the heat pump is cheaper to run than the boiler it replaced.
Usually not. The Energy Saving Trust states that most heat pump installations are considered permitted development, so no planning permission is needed. There are exceptions, and it recommends checking with your local planning department, particularly if you live in a listed building or a conservation area. Permitted development rights are set separately in England, Wales, Scotland and Northern Ireland, so the detail depends on which nation you are in. Check before the unit is sited rather than after.
With a standard air source heat pump, yes. The Energy Saving Trust is clear that a heat pump does not provide hot water on demand the way a combi boiler does, so you need somewhere to store it. A cylinder usually fits in any cupboard measuring at least 80cm by 80cm. If you have no space, the alternatives EST names are a heat battery, which takes up less room than a cylinder, a hybrid system where a boiler handles hot water on demand, or instantaneous water heaters fitted under a sink. Note that hybrid systems are not eligible for the Boiler Upgrade Scheme.