Energy and green upgrades
Air source heat pump cost and the 7,500 pound BUS grant (2026)
An air source heat pump extracts heat from outside air to warm your home and water. In England and Wales the Boiler Upgrade Scheme gives 7,500 pounds towards the cost, and qualifying heat pumps carry 0 percent VAT until 31 March 2027. Final cost depends on your home, so get quotes from MCS-certified installers.
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Get matchedWhat it is
An air source heat pump (ASHP) is an electric heating system that absorbs warmth from the outside air, even in cold weather, and uses it to heat your radiators or underfloor heating and your hot water. It replaces a gas or oil boiler.
Because it moves heat rather than burning fuel, a well-designed heat pump delivers more heat energy than the electricity it consumes, which is what makes it efficient.
How it works
An outdoor unit contains a fan and a refrigerant circuit. The refrigerant absorbs heat from the air, a compressor raises its temperature, and a heat exchanger transfers that heat to the water in your heating system.
A good installation starts with a heat-loss survey of your home so the system, radiators and flow temperature are sized correctly. Getting this design right is what separates a comfortable, efficient heat pump from a disappointing one.
Installation typically takes one to three days for a straightforward home, longer if radiators or pipework need upgrading.
Cost
- Before the grant
- Get a quote Total cost depends on the size of the heat pump, your home and whether radiators or pipework need upgrading.
- Boiler Upgrade Scheme grant
- 7,500 pounds off For a qualifying air source heat pump in England and Wales (gov.uk). The grant is applied by the installer, lowering what you pay.
- VAT
- 0% until 31 March 2027 Qualifying heat pumps carry 0 percent VAT until 31 March 2027.
The 7,500 pound grant is deducted by your installer, so you pay the balance. We do not quote a single fixed price because the right system depends on your home's heat loss. Get itemised quotes from MCS-certified installers.
Who it is for
- Homeowners replacing an ageing gas, oil or LPG boiler who want a lower-carbon heating system and can use the 7,500 pound grant.
- Well-insulated homes with space outside for the unit get the best results, but the scheme no longer requires you to have completed all recommended insulation first.
- Households off the gas grid, where a heat pump often compares well against oil or LPG running costs.
Grants and savings
- Boiler Upgrade Scheme: 7,500 pounds towards an air source or ground source heat pump in England and Wales (gov.uk).
- 0 percent VAT on qualifying heat pumps until 31 March 2027 (gov.uk).
- Running costs depend on your tariff and how well the system is designed; a heat-pump-friendly electricity tariff can reduce them.
How to choose a vetted installer
- The Boiler Upgrade Scheme requires an MCS-certified installer, so this is non-negotiable for the grant.
- Ask to see the heat-loss calculation and the proposed flow temperature; a lower flow temperature usually means a more efficient system.
- Check the installer is also TrustMark-registered and get the performance estimate and warranties in writing.
Frequently asked questions
How much does an air source heat pump cost after the grant?
The 7,500 pound Boiler Upgrade Scheme grant is deducted by the installer, so you pay the balance. The total before the grant varies with the size of system and any radiator or pipework upgrades, so get itemised quotes from MCS-certified installers.
Do I still need to insulate my home before getting the grant?
The Boiler Upgrade Scheme no longer requires you to have completed all recommended insulation measures first, which has opened it to more homes. Good insulation still helps a heat pump run efficiently, so it is worth doing where practical.
Who is eligible for the Boiler Upgrade Scheme?
The scheme covers homeowners and small non-domestic properties in England and Wales replacing fossil-fuel heating with a qualifying heat pump, installed by an MCS-certified installer. Check the current eligibility rules on gov.uk before you commit.
Is a heat pump cheaper to run than a gas boiler?
It can be, because a heat pump delivers more heat than the electricity it uses, but running cost depends on your electricity tariff and how well the system is designed. A heat-pump-friendly tariff and a low flow temperature help keep bills down.
Sources
Editor, Sorted Property
Oliver leads Sorted Property's editorial coverage of UK home services. He researches and writes the plain-English guides that help homeowners choose between installers and trades, drawing on the standards set by bodies such as MCS, TrustMark, the Energy Saving Trust and the Property Care Association, and is clear about what to check before any work starts.
Last reviewed: 11 June 2026