The government has invested £12 billion with the aim of making our homes warmer and cheaper to heat. Funding is not given directly, but through installers, local authorities, energy companies and other bodies.

You may have heard of the Domestic Renewable Heat Incentive (RHI) scheme, where payments are made for seven years and are based on the amount of renewable heat made by your heating system. This is currently no longer open to new applicants and has been replaced with the boiler upgrade scheme instead – see below.


Boiler upgrade scheme 

The Government’s Boiler Upgrade scheme provides grants for low carbon or renewable heating systems, including air source heat pumps. Offgem is the boiler upgrade scheme administrator and has outlined it as follows:


The Boiler Upgrade Scheme (BUS) supports the decarbonisation of heat in buildings. It provides upfront capital grants to support the installation of heat pumps and biomass boilers in homes and non-domestic buildings in England and Wales.

Acting on behalf of property owners, installers can apply for:

  • £5000 off the cost and installation of an air source heat pump
  • £5000 off the cost and installation of a biomass boiler
  • £6000 off the cost and installation of a ground source heat pump, including water source heat pumps

£450 million of grant funding is available over three years from 2022 to 2025.


Smart Export Guarantee

Financial support for small-scale generators of renewable electricity who export to the electrical grid (UK wide).


Reducing fuel poverty

There are separate initiatives across the UK, where local authorities can provide funding for lower income or vulnerable households.

Sustainable Warmth Competition (England) awards funding to local authorities to help them upgrade energy inefficient homes of low-income households.

Social Housing Decarbonisation Fund (England) awards funding to local authorities and some other providers of social housing to help them upgrade energy inefficient housing stock.

Nest (Wales) provides free advice and support to help people improve the energy efficiency of their home. It can also offer a package of energy efficiency measures to help reduce the home energy bills of some people who are on a low income or struggling to meet the cost of their domestic energy needs.

Home Energy Efficiency Programmes for Scotland (HEEPS) funds local authorities to develop and deliver energy efficiency programmes (mainly solid wall insulation) in areas with high levels of fuel poverty

Energy Efficient Scotland: Warmer Homes (Scotland) is a national scheme aimed at homes in fuel poverty. It has a strong focus on heating and insulation measures to improve the energy efficiency of properties making them warmer and more affordable to heat.

Boiler Replacement Scheme (Northern Ireland) helps owner occupiers to improve the energy efficiency of their homes. The scheme is open to owner occupiers whose gross household income is less than £40,000 and who have an inefficient boiler which is at least 15 years old.


Energy Company Obligation (ECO)

Energy companies now have an obligation to help their customers save energy by fitting energy saving measures. The aim is to reduce fuel poverty, and therefore is focussed on low income or vulnerable households. It may include installation of insulation, heating savings or upgrading an inefficient heating system / boiler replacement.


Energy Grants in Scotland

In Scotland, there are several different schemes running in relation to energy saving grants and loans instead of the boiler upgrade scheme (England and Wales).


Home Energy Scotland Loan

An interest-free loan funded by the Scottish Government, to help make energy saving improvements to your home. The maximum funding for energy efficiency measures is £15,000 (including a maximum cashback amount of £6,000).

Private Rented Sector Landlord Loan

Loan funding for registered private landlords to improve the energy efficiency of their properties. This doesn’t apply to holiday lets or second homes. Funding is available for installation of energy efficiency improvements, renewable technologies and energy storage systems.


Zero waste Scotland for businesses

Provides unsecured loans for the installation of energy efficient measures. Businesses can also apply for a 75% cashback grant for some renewable heating systems and 30% for other energy efficient measures.

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