The ground source heat pump grants available for homeowners in 2023

Kensa's Shoebox Heat Pump
(Image credit: Kensa Heat Pumps)

Ground source heat pump grants can make a big difference for homeowners looking to install a heating system that can help lower your long-term energy costs. 

Ground source heat pumps require electricity to transfer heat from underground to heat your home through radiators or underfloor heating. But this is used in a highly-efficient way to produce heating, which in theory reduces running costs and carbon emissions compared to natural gas boilers. 

However, homeowners looking for an environmentally friendly way of heating a home or to replace an old or damaged boiler can find ground source heat pump costs prohibitive. A basic ground source heat pump costs between £2,000 to £15,000, depending on size and brand, according to energy expert and Homebuilding & Renovating contributor Tim Pullen.

The government is aiming for 600,000 heat pumps to be installed in UK homes per year by 2028, which is why it is championing initiatives to lower installation costs and drive uptake. 

James Standley, COO of The Kensa Group, says: “If we are to meet the government commitment to install 600,000 heat pumps per year by 2028 everyone across the government, the industry and the economy must unite to reach this goal.”

Here’s some of the grants available now across the UK to help all homeowners benefit from ground source heat pump grants. 

1. Boiler Upgrade Scheme

The Boiler Upgrade Scheme is arguably the most well-known ground source heat pump grant, which launched in April 2022 and will run for three years. Around 90,000 homes will be able to benefit as long as the total heat pump system capacity is below 45kW.

Homeowners can apply for a one-off grant of £6,000 towards a ground source heat pump, and £5,000 for an air source heat pump. You can apply for funding via the energy regulator Ofgem, which will then agree quotes for the installation from MCS-certified installers. 

While £6,000 is a big saving, homeowners will still need to pay the remainder of the costs to purchase the unit, installation and any other upgrades (such as new radiators) that may be required.

2. Local Authority Delivery Scheme

The Green Homes Grant first launched in 2020 before closing to new applications in 2021, but a local authority delivery scheme that launched alongside it remains in place. 

Under this scheme low-income households can receive funding from their local council to have energy efficiency measures undertaken, such as installing a ground source heat pump.

There is no set grant fee in place, with funding amounts dependent on your local authority and the work required.

The scheme is now in phase two of its implementation, which means that to meet the criteria, your home must have an Energy Performance Certificate (EPC) rating of D or below, and an annual income below £30,000. You may also be eligible if you earn £30,000 a year but receive certain benefits. To apply, visit your local council’s website.

3. Home Energy Scotland Grant and Loan scheme

Available in Scotland only, the Home Energy Scotland Grant and Loan scheme announced this month will enable homeowners to apply for £7,500 (or up to £9,000 in rural areas) towards the cost of a new heat pump.

This £7,500 heat pump grant can be directly applied for on its own or alongside an interest-free loan from Home Energy Scotland. 

4. District heating schemes

Certain district heating schemes across the UK offer neighbours the chance to share a ground source heat pump loop, which can reduce installation costs and improve energy efficiency for participating homes. 

Typically a ground source heat pump is connected to a single ground array, which takes heat from the surrounding earth for use in the heat pump (and, in turn, the property). But Kensa’s Heat the Streets project, which launched this year, sees multiple ground arrays connected to a shared ground loop array. 

A forthcoming EDF Energy project in 2023 will also invite homeowners to share a ground source array, or loop, that could power multiple heat pumps on a street. Patrick Dupeyrat, EDF UK R&D Director, said of the project: “This will accelerate the country’s road to net zero, while providing customers with vital support as they decarbonise their heating in a cost-efficient way.”

5. Social housing projects 

Under the government’s Social Housing Decarbonisation Fund (SHDF), councils can apply for funding to have ground source heat pumps installed in residents’ homes.

These schemes include Thurrock Council’s (in Essex) partnership with Kensa Contracting, which will install 273 heat pumps in council-owned residences which have an EPC rating below C. This is expected to be completed in 2023.

And in May, Kensa began work on installing ground source heat pumps at two of Gravesham Borough Council’s housing developments.

What else is available?

Octopus Energy and Lloyds scheme

A pilot scheme launched in 2022 by Octopus Energy and Lloyds Bank offers Halifax mortgage (a subsidiary of Lloyds Banking Group) customers a £1,000 cash back if they install a heat pump through Octopus Energy.

Barclays' Greener Homes Reward

This Barclays scheme is encouraging its residential mortgage customers to undertake energy efficiency measures to their homes and receive £2,000 cashback towards a new ground source heat pump.

What about outside of England?

  • Nest (Wales only): Low-income households people with certain health conditions can apply to get help with heat pump installation costs
  • Warmer Homes Scotland (Scotland only): Designed for low-income households, elderly and vulnerable people who can apply for heat pump grants and other energy-efficient home improvements.
  • If you live in Northern Ireland then you can contact NI Energy Advice for advice on heat pump grants.
Jack Woodfield
News Editor

Jack has worked in journalism for 11 years and is the News Editor for Homebuilding & Renovating, a role he has had since 2019. He strives to break the most relevant and beneficial stories for self builders, extenders and renovators, including the latest news on the construction materials shortage and hydrogen heating. In 2021 he appeared on BBC's The World at One to discuss the government's planning reforms. 


He enjoys testing new tools and gadgets, and having bought his first home in 2013, he has renovated every room and recently finished a garden renovation.