Heat pump grants in Scotland: a guide for installers

Scottish homeowners can get funding for a new heat pump through the Home Energy Scotland (HES) Grant and Loan Scheme. Here’s what installers need to know about heat pump grants in Scotland

The Scottish government has set itself on the path to achieving net zero by 2045. But, to hit this target, Scotland’s emissions need to be reduced by 75% by 2030 and 90% by 2040.

In 2021, the Scottish government set out its plan to curb emissions from buildings, which includes providing grants and loans to help homeowners switch to low carbon heating systems.

Under the Home Energy Scotland Grant and Loan scheme, homeowners can benefit from grant funding of up to £7,500 for a new heat pump, such as Vaillant’s popular aroTHERM plus. Certain households in rural areas could qualify for an additional £1,500 to further support the transition to low carbon heating.

If the grant doesn’t cover the cost of a heat pump, homeowners can also take out an optional interest-free loan.

Alongside heat pump grants in Scotland, there’s a UK-wide 0% VAT rate on heat pumps until 31 March 2027 to help reduce the costs for your customers even more.

Scottish homeowners can apply for a grant of up to £7,500 towards the installation of a new air source or ground source heat pump.

Some properties in remote parts of the country qualify for a rural uplift that increases the possible funding to £9,000.

If the grant amount doesn’t cover the entire cost of installing a heat pump, homeowners also have the option of applying for an interest-free loan of up to £7,500. This can be repaid over a period of up to 10 years.

So, if they combine the maximum grant and loan amounts and qualify for the rural uplift, a homeowner could potentially secure funding of £16,500 towards a heat pump system.

"Under the Home Energy Scotland Grant and Loan Scheme, homeowners can benefit from grant funding of up to £7,500 for a new heat pump"

The scheme is only open to homeowners in Scotland – so landlords, businesses and property developers are excluded. But people undertaking a self-build can apply for support for low carbon heating.

The grant is intended for new installations, so it can’t be used to fund a replacement heat pump. But homeowners can take out the optional interest-free loan for this purpose.

The low carbon heating system being installed must be recommended in either an Energy Performance Certificate or a report issued by a Home Energy Scotland advisor.

The funding only becomes available once a written offer is made, so the work can’t begin until the homeowner receives this. But once they have the offer, they have up to nine months to carry out the work.

There are also some installer-specific requirements. You and the product must be MCS-certified. And once you’ve installed a new system, the homeowner will need to rate and review your service on the Energy Saving Trust’s Renewables Installer Finder (if you’re listed) before claiming the funding – so it’s worth registering.

There are limited funds available – the Grant and Loan scheme functions on a first-come-first-served basis and will continue until the funding runs out or the end of the financial year, whichever is sooner – so homeowners need to act quickly.

Homeowners need to personally apply for the funding – installers can’t apply on their behalf.

The Home Energy Scotland website has the full details of who is eligible, the application process and supporting documentation required.