Heat pump grant applications see 75% annual rise with installations predicted to rise further

Heat pump applications rose by 75% annually in February, according to the latest government data.

Lowering installation cost and an increase in heat pump grants to £7,500 has led to ground and air source heat pumps experiencing record numbers of installations at the start of 2024.

It is also predicted heat pump installations could be set to increase further with the government removing the need for cavity and loft insulation requirements to qualify for the Boiler Upgrade Scheme.

Fourth month of more than 2,000 installations since grant was increased

The latest government data reveals demand for heat pumps has surged with applications for heat pump grants rising annually by 75% in February.

The announcement was made on the two-year anniversary of the Boiler Upgrade Scheme's introduction and also marks the fourth month where over 2,000 applications have been received since the grants were increased to £7,500.

Energy Security Secretary, Claire Coutinho, said: "No family should be forced to make changes that aren’t right for them. With the right support – like the 50% increase in heat pump grants – families can make their homes warmer and cut their emissions without breaking the bank. 

"Figures out today show that our plan is working with applications up by 75% from last year."

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: "Demand for heat pumps is soaring, as we make it easier than ever to make the switch to electric heating without big upfront costs. 

"Our boosted £7,500 grants are helping people create a warm home and lower their emissions. And with applications up 75%, it’s clear our approach is hugely popular with many families."

'Costs will continue to fall'

As applications for heat pumps increase, it is projected that installation costs will fall making them more viable for all households.

Greg Jackson, Founder of Octopus Energy said: "Heat pumps are about four times more efficient than old fashioned gas boilers but the UK is way behind other countries.

"Now, thanks to the government scheme, they can be cheaper than boilers and more and more customers are joining the queue to get one. As we ramp up the scale of the industry, costs will continue to fall."

This is supported by research from Imperial College London and the University of Edinburgh who suggest installation costs for air source heat pumps could fall by 20% by 2030.

Insulation requirement changes may encourage further increases in uptake

Installations could also be set to increase further following the government's decision to remove cavity and loft insulation requirements from the Boiler Upgrade Scheme.

Previously, homes with recommendations for loft or cavity wall insulation on their EPC would not qualify for the scheme. However, this requirement is now being removed.

This will make installing an air source heat pump even cheaper and easier, with DESNZ estimating this will lower costs by £2,500 for a semi-detached property.

However, David Hilton, our renewable energies expert, criticised this decision and advises against installing without proper insulation claiming it is "a short-term win" claiming "insulation will always increase efficiency of heat pump systems".

David Hilton

David is a seasoned renewables and ventilation installer, recognised for his longstanding contributions to Homebuilding and Renovating magazine. Holding membership in the Gas Safe Register and armed with a Masters degree in Sustainable Architecture, David stands as an authoritative figure in sustainable building and energy efficiency. His extensive knowledge spans building fabrics, heat recovery ventilation, renewables, and conventional heating systems. Additionally, he serves as a distinguished speaker at the Homebuilding & Renovating Show.