What the state pays towards a heat pump, and the catch on all of it
£7,500 for air-to-water, £2,500 for air-to-air, £1,500 more if you are off the gas grid on oil or LPG. Every one of them runs through MCS.
By David White
There is more public money available for domestic heating equipment than most households realise, it is spread across several schemes that do not reference each other, and one requirement runs through all of it.
The money, in one place
Under the Boiler Upgrade Scheme, in England and Wales:
| What | Grant |
|---|---|
| Air source heat pump, to water | £7,500 |
| Ground source heat pump | £7,500 |
| Biomass boiler | £5,000 |
| Air-to-air heat pump | £2,500 |
Plus an extra £1,500 towards an air source or ground source heat pump where the property is heated by oil or LPG and has no mains gas connection. Both have to be true. That uplift runs until March 2027.
Separately, and easy to miss because it is not a grant, installing qualifying energy saving materials in Great Britain carries zero rated VAT until 31 March 2027, reverting to 5 per cent on 1 April 2027. Heat pumps qualify. On a five figure installation that is not a rounding error, and it is a deadline rather than a benefit that will still be there later.
Which machine you are actually being sold
This site never writes “heat pump” without saying which, and here is why it matters commercially rather than pedantically: the two types are separated by five thousand pounds.
An air-to-water heat pump replaces your boiler. It feeds radiators or underfloor heating and hot water, it heats only, and it is what almost everyone in Britain means by the phrase. £7,500.
An air-to-air heat pump is a reversible air conditioner. Same box as a cooling unit, run in both directions, so it heats in winter and cools in summer. £2,500, residential property only, and it is the newer addition to the scheme.
They are not competing answers to one question. One replaces a boiler and one does not heat your water. A quote that says “heat pump” without saying which is a quote you cannot check against this table.
The catch on all of it
The 2026 amendment to the scheme defines an installer as a person certified by the Microgeneration Certification Scheme, and it removed the previous reference to equivalent schemes. MCS or nothing.
That is now the single gate on almost every pound above. And it is not confined to heating: solar needs the same certification to be paid for exported electricity under the Smart Export Guarantee, which is a completely different scheme with a different purpose.
So one certification, held by the company doing the work, decides whether a household can access most of the public money attached to energy equipment in Britain. Nothing on a firm’s website makes that obvious, and a firm that does not hold it has no reason to raise a scheme it cannot use.
Ask before the quote. The question is “are you MCS certified, and for which technologies”, because certification is per technology rather than general.
How the money reaches you
It does not reach you. The scheme is installer led: your installer applies to Ofgem on your behalf, you confirm your consent within 14 days, and the grant comes off the price rather than arriving afterwards.
Which has a consequence worth holding on to when comparing quotes. Two prices that look close may be thousands apart underneath, depending on whether each one already has the grant deducted. Ask each installer to state the figure before and after.
What is not covered here
Financing, loans and any interest bearing arrangement are deliberately absent. They exist, several suppliers and installers offer them, and the terms vary enough that anything written here would be either vague or wrong. This site does not carry a number it cannot source, and a representative APR from one lender is not a fact about your deal.
The grant amounts above are on the government’s Boiler Upgrade Scheme page, and the VAT position is in VAT Notice 708/6.
Questions
- How much is the grant for an air source heat pump?
- £7,500 towards an air-to-water air source heat pump, the type that feeds radiators and hot water. A ground source heat pump is also £7,500 and a biomass boiler £5,000. An air-to-air heat pump, which is a reversible air conditioner, is £2,500 and is a separate category.
- What is the extra £1,500 for?
- An additional £1,500 towards an air source or ground source heat pump for a property that is heated by oil or LPG and has no mains gas connection. Both conditions have to be true, and the uplift runs until March 2027.
- Does my installer have to be MCS certified?
- Yes, and this is now in the regulations rather than in guidance. The 2026 amendment defines an installer as a person certified by the Microgeneration Certification Scheme and removed the previous reference to equivalent schemes. A firm without it cannot apply on your behalf however good its work is.
- Do I apply for the grant myself?
- No. The scheme is installer led. Your installer applies to Ofgem on your behalf, you confirm your consent within 14 days, and the money comes off what you pay rather than arriving in your account.
- Is there VAT on a heat pump installation?
- Not until 31 March 2027. Installing qualifying energy saving materials in Great Britain, which includes heat pumps, is zero rated for VAT until then and reverts to the reduced rate of 5 per cent from 1 April 2027.
- Does the grant cover a new build?
- No. New builds are excluded, with a limited exception for some self-builds, and the scheme covers England and Wales only.