Boiler Upgrade Scheme 2026: heat pump cost after £7,500 off
The Boiler Upgrade Scheme takes £7,500 off an air source heat pump in England and Wales. Here is what you are likely to pay once the grant is deducted.
Replacing a gas boiler with an 8 kW air source heat pump typically costs £13,000 with 0% VAT, before any grant, and most quotes we would expect to see fall between £10,100 – £16,800. In England and Wales the Boiler Upgrade Scheme takes £7,500 off that price, provided your installer is MCS certified. So the sum to budget is the quoted price minus £7,500, and for most homes that is the single biggest factor in whether a heat pump stacks up.
How the Boiler Upgrade Scheme works
The scheme is a fixed £7,500 off the installation of an air source or ground source heat pump in England and Wales. It is a grant, not a loan: the amount comes off what you pay.
The condition that matters most in practice is that the installer must be MCS certified. If they are not, there is no grant. Check the certification before you sign, not after the unit is on the wall, and ask the installer to confirm that your home and your current heating system are eligible before any deposit changes hands.
The discount should appear on your quote. Ask for it to be shown as its own line, so you can see the full installation price and the grant separately. That makes comparing quotes much easier: two installers can show the same "after grant" figure while pricing very different equipment.
What you pay after the grant
Our figures are shown before the grant is deducted, so take £7,500 off to get your likely outlay:
| System | Typical price before grant | What changes |
|---|---|---|
| Basic | £9,750 | Monobloc unit, separate hot water cylinder, simple controls |
| Mid-range | £13,000 | Split system with indoor unit and built-in tank, buffer, filter |
| Premium | £15,400 | Zoned controls, larger buffer, water treatment, smart controls |
At the basic end, the grant covers a large share of the job. At the premium end it still takes a meaningful slice off, but the extra controls and zoning are paid for by you.
These prices cover removing the old boiler, a base for the outdoor unit, the heat pump itself, buffer tank, pipework, filter, expansion vessels, a dedicated electrical supply and commissioning. They do not include new radiators or underfloor heating, a heat-loss survey and design, or any upgrade to your electricity supply. You can see the full breakdown and adjust the size in our Air source heat pump.
How we calculate the price
We build each estimate from the job itself: the hours each trade needs, multiplied by local labour rates, plus the equipment and materials. We then check the result against market prices and real quotes. Because labour rates vary across the UK, the same job costs more in London and the South East than in the North East or Wales; select your area on the cost guide to see the local figure.
The costs the grant does not touch
The grant is fixed, so every extra on the quote comes straight out of your pocket. Watch for:
- Radiator upgrades. Heat pumps run at lower flow temperatures than boilers, so some rooms may need larger radiators. A proper heat-loss calculation tells you which ones. This is often where quotes differ most.
- Hot water cylinder space. If you have a combi boiler, you will need room for a cylinder or a unit with a built-in tank.
- Electrical work. A new dedicated circuit is included in our figures. A consumer unit replacement, if needed, is not. Notifiable electrical work in England and Wales must be done by a registered electrician (Part P) or notified to building control.
- Siting the outdoor unit. Longer pipe runs, wall brackets or awkward access add labour.
Scotland: a different scheme
The Boiler Upgrade Scheme covers England and Wales. In Scotland, Home Energy Scotland offers a grant of up to £7,500, plus an optional interest-free loan of up to £7,500. The grant plus loan can cover a larger share of the upfront cost than the grant alone, which helps if the radiators or cylinder also need work. Check the conditions with Home Energy Scotland before you commit to an installer.
VAT and the wider picture
Installing a heat pump is charged at 0% VAT until 31 March 2027, and our figures already use that rate. That relief sits on top of the grant: you get the £7,500 off a price that already carries no VAT.
The Warm Homes Plan, published in January 2026, commits £15bn to 2030, including grants for low-income households and low- or zero-interest loans that are being phased in. If your household may qualify, it is worth checking what is available locally before you sign a quote, because help for the parts the Boiler Upgrade Scheme does not cover can change the sums.
Before you sign
- Get at least three quotes from MCS certified installers, each with a heat-loss calculation for your home.
- Ask each one to list the heat pump size and model, the cylinder, any radiators being replaced and the grant as separate lines.
- Compare the full price before the grant with our figure, not only the price after it.
- Put the total into our "Is my quote fair?" tool, which compares your quote with what homeowners in your area typically pay: Is my quote fair?.
A quote well above £16,800 before the grant is not automatically wrong, especially if it includes several new radiators, but it should come with a clear reason.