Big change to scheme where you could get £7,500 free cash towards home improvements to cut energy bills

HOUSEHOLDS could receive extra support with their energy bills thanks to a big change to a government scheme.

The Boiler Upgrade Scheme, which provides homeowners with up to £7,500 to install heat pumps, could soon be extended to cover a wider range of green technologies.

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This expansion would allow customers to apply for funding to purchase items such as air-to-air heat pumps and heat batteries.

Ministers have stated that the initiative will offer families greater flexibility in upgrading their heating systems.

Under the proposed changes, households could opt to lease a heat pump for an affordable monthly fee or spread the cost over time, rather than facing the burden of a large upfront payment.

The new payment options aim to simplify the transition for families, potentially saving them hundreds of pounds a year on energy bills in the process.

Heat pumps, which use electricity to draw warmth from the air or ground and function like a refrigerator in reverse, are regarded as essential to the UK’s efforts to replace gas boilers.

They play a crucial role in the drive to achieve net zero targets while also shielding bill-payers from the volatility of gas price fluctuations.

Government figures reveal that March saw a record 4,028 households apply for the scheme—an 88% increase compared to the same month last year.

Energy Minister Miatta Fahnbulleh said: "We are now proposing to give working families more choice and flexibility to pick the low-carbon upgrades that work best for them."

According to Checkatrade, the installation of air source heat pumps typically ranges from £3,000 to £15,000, while ground source heat pumps come with a significantly higher price tag, costing between £16,000 and £49,000.

The exact cost is determined by factors such as your property type and the complexity of the installation.

A solar battery storage system, commonly used alongside solar panels, typically costs homeowners between £4,000 and £10,000.

Although the initial investment may be high, the potential for substantial long-term savings on energy bills makes it an appealing option.

Heat pumps, for example, can shave £261 to £600 off annual energy bills, depending on the system you're replacing and how efficient your home is, according to the Energy Saving Trust.

And the savings could increase over time as electricity prices fall and gas prices rise, particularly if paired with solar.

But the initial cost still puts many people off and that's where this grant could come in handy.

Companies like Octopus Energy and Aira are offering ways to spread the cost over several years.

Octopus Energy, for example, offers loans between five and 10 years at 9.9% APR, with monthly payments starting from around £52.

Aira offers a subscription-based model, where customers pay a monthly fee covering installation, servicing, and a 10-year performance guarantee.

Monthly payments start from £139, with no upfront costs.

Another company, Fornax, offers a Heat Pump Plan with no upfront cost, and monthly payments over 6 to 12 years.

The plan includes installation, servicing, and unlimited repairs, with no callout fees or excess.

These options could make it easier for households to switch to low-carbon heating and save money on their energy bills.

Consumer group Which? said the new proposals are a step in the right direction, but warned more support is needed to encourage take-up.

Sue Davies, head of consumer rights at Which?, said: "It is clear from Which?'s research that there is more work to be done to combat the issues preventing consumers from switching to sustainable heating alternatives, with many people put off by high costs, lack of awareness and difficulties finding reliable and trusted installers."

"These proposals could help more consumers make the leap... but it’s essential the government also works to improve awareness, tackle affordability and make accreditation for installers mandatory."

How do I apply for the funding?

To apply for a grant, you'll need to find an MCS-certified installer who will handle the application for you and knock the grant value off your installation cost. 

So, if your air source heat pump comes in at £12,500, you'd only have to fork out £5,000.

You'll need to live in England or Wales, own your property, have a valid EPC, and be replacing a fossil fuel system.

You can find out more by visiting gov.uk/apply-boiler-upgrade-scheme.

Are heat pumps worth it?

Experts say heat pumps could be a smart investment in the long run, especially for families looking to reduce their carbon footprint and escape the gas market's wild price swings.

However, it's not a one-size-fits-all solution  and not every home is suited to a heat pump or solar setup.

The government is urging more households to come forward and check their eligibility, as it eyes a national roll out of greener energy by 2035.

So if you're planning a renovation or just want to future-proof your heating system, now might be the time to act.