UK heat pump grants and manufacturer targets face potential changes

The UK government is considering significant changes to heat pump incentives and manufacturer requirements. Under the proposed Clean Heat Market Mechanism, boiler manufacturers could see their heat pump sales targets increase from 8% of relevant sales in 2026-27 to 18% by 2030-31. While critics label this a ‘boiler tax,’ industry insiders suggest higher targets might drive down consumer prices through increased competition.

Simultaneously, the Department for Energy Security and Net Zero (DESNZ) is exploring potential cuts to the Boiler Upgrade Scheme to help fund defense spending. The scheme currently provides fixed grants to assist with installation costs: £7,500 for most households, £9,000 for off-grid homes replacing oil or LPG, £5,000 for biomass boilers, and £2,500 for air-to-air heat pumps.

Data indicates the £7,500 grant covers approximately 60% of the median cost for an air source heat pump installation, though it covers less than a third of the cost for ground source systems. The scheme has supported nearly 80,000 installations since 2022.