Energy grants for off-gas-grid homes: oil, LPG and rural heating

Roughly 15% of the UK's 28 million properties are not connected to the mains gas grid¹. These homes, heated mostly by oil, LPG, electric heaters or coal, face a set of costs that gas-grid households never see: delivered fuel bought in bulk, prices that swing with world oil markets, and no price cap standing between them and a bad winter. The average fuel poverty gap for a household off the gas grid was £804, over three times the £222 gap for households on the grid².

Grant support for these homes is real but fragmented. The headline offer for an oil or LPG home today is the Boiler Upgrade Scheme, which from 21 July 2026 pays an uplifted grant of £9,000 for eligible off-gas-grid properties replacing oil or LPG heating with a heat pump³. Alongside it sit the closed Home Upgrade Grant, which spent hundreds of millions of pounds exclusively on off-gas-grid homes, the Warm Homes: Social Housing Fund with its extra £7,500 for off-grid low carbon heating, and separate schemes in Scotland and Wales.

For a household thinking about energy independence, these grants matter more than they do on the grid. An off-gas-grid home that moves from delivered oil to a heat pump, especially paired with insulation and solar, cuts its dependence on fuel deliveries, bulk-buying timing and oil price shocks at a stroke. What remains is the electricity itself, still bought from a supplier. The pages on grants and energy independence cover that trade in more depth.

The schemes at a glance

Off-gas-grid households sit at the intersection of several schemes, each with different rules on who applies, what is paid for and whether the money is still moving.

Two smaller payments have also existed specifically for off-grid homes. The Alternative Fuel Payment delivered a one-off £100 to UK households not on the mains gas grid¹³, and the Energy Bills Support Scheme Alternative Funding extended bill support to off-grid homes¹⁴. Both were responses to the 2022 to 2023 energy crisis rather than ongoing grant programmes, but they show the pattern: when support is designed for the general run of households, off-grid homes usually need a separate route.

The rest of this page works through the main schemes in turn, because the eligibility rules, the funding scale and the measures paid for differ enough that a single summary would mislead.

Home Upgrade Grant: who qualified and what it covered

The Home Upgrade Grant was the scheme built around off-gas-grid homes. Phase 1 opened in January 2022¹⁵ and was a £218.6 million programme targeting low-income households in off-gas-grid properties in England⁸. Official statistics record the allocation as £220 million, exclusively for homes off the gas grid⁴, while a Commons research briefing gives the figure as £218 million¹⁶; both describe the same phase, and the difference is one of how the totals were counted at different dates. Phase 1 closed after delivering upgrades to homes between 2022 and 2023⁴.

The scheme's purpose was narrow and deliberate: to support low income households living off the mains gas grid in England, by providing full grant funding¹⁷. That "full grant funding" point matters. Households did not contribute a share of the cost, which is what separated HUG from loan-based schemes and from the Boiler Upgrade Scheme, where the grant covers only part of an installation.

Phase 2 extended the same idea at larger scale. HUG 2 was exclusively for off-gas-grid properties and allocated £630 million for delivery from September 2023⁴. A government response on insulation policy gives the allocated figure as £582 million to local authorities in England²; the two figures differ, and the £630 million figure is the later official statistics total. Oxfordshire, for example, was awarded £6.417 million under HUG 2 to provide energy efficiency upgrades and low carbon heating to low income households¹⁸.

Applications were never made directly to central government. Local authorities bid for funding and ran the schemes in their patches, so a household's route in was through its council or the council's delivery partner. Leeds' earlier Green Homes Grant Local Authority Delivery scheme shows the model in practice: households had to have an income of less than £30,000 per year, or receive certain benefits, and own or have mortgaged a home rated EPC D, E, F or G¹⁹. HUG worked the same way, through councils rather than a national application form.

For the off-grid household, the significance of HUG is twofold. First, it put real money, close to £850 million across both phases, exclusively behind homes with no gas connection. Second, because both phases are now closed or fully allocated, the live successor routes are the Boiler Upgrade Scheme for heating and the Warm Homes: Local Grant for whole-home upgrades.

Warm Homes: Social Housing Fund Wave 3 and the off-gas-grid uplift

Social housing tenants do not apply for grants themselves; their landlords do. The vehicle is the Warm Homes: Social Housing Fund, the rebranded successor to the Social Housing Decarbonisation Fund, and its Wave 3 is the largest single tranche: originally allocated £1.29 billion for delivery from April 2025 to March 2028⁵, a figure confirmed in the scheme's published allocation²⁰. A Commons briefing records that funding for the scheme had been increased from its initial allocation of £459 million to £754 million¹⁶, and the government states that its £1.3 billion commitment has been more than matched by the sector, meaning over £2.6 billion is currently in delivery¹¹. Just under £1.15 billion has been offered to retrofit social homes across 121 Challenge Fund projects²¹.

For off-gas-grid homes the scheme carries a specific incentive. The Wave 3 cost cap is £7,500 of grant funding per home, and an additional £7,500 of grant funding is available if the grant recipient installs low carbon heating measures in homes off the gas grid⁵. The scheme guidance also describes the total available grant funding for each off-gas-grid home with the uplift as £15,000⁵. The two statements describe the same arrangement: a base cap plus an uplift, which together reach £15,000.

Wave 3 also carries a separate offer for homes on the gas grid: up to 10% of homes in an application can access a £20,000 grant fund per home to install low carbon heating, and with that offer the total available grant funding for each home is £20,000 instead of the base cost cap⁵. Installation of a low carbon heating measure is mandatory in each home using that offer, with energy efficiency measures such as solar PV or insulation also expected, so that bills do not go up⁵. The £20,000 offer sits outside the co-funding structure and does not require co-funding⁵.

The Warm Homes Plan announced a further £295 million of grant funding available through the scheme in the 2026/27 financial year⁵, recorded in the heat and buildings factsheet as an additional £295 million for FY 26/27¹⁰. For an off-grid social tenant, the practical meaning is simple: the fund pays more for a home like theirs than for an on-grid one, because the government recognises that taking an oil or LPG home onto low carbon heating costs more and saves more.

Income and EPC eligibility: low-income homes rated D and below

Every one of these schemes tests two things: how much money the household has, and how poor the home's energy performance is. The Home Upgrade Grant served low income households in properties off the gas grid and in energy efficiency bands D to G¹⁶. The official statistics describe the combined LAD and HUG schemes as supporting upgrades for low-energy efficiency, EPC of D or lower, low-income households with income below £30,000 across England⁴, and the March 2025 release uses the same test²².

HUG 2's stated aim gives a sense of what the money was meant to achieve: to improve the energy performance of EPC F to G homes to at least band D, and EPC D to E homes to band C where possible, with a space heating demand consideration of 90 kWh/m²/year, to take homes out of fuel poverty and progress towards net zero by 2050⁹. That is a demanding standard. A home lifted to band C with space heating demand near 90 kWh/m²/year uses a fraction of the heat of a typical off-grid stone or pre-war property, and it is the level at which a heat pump becomes a realistic single answer to heating rather than a supplement.

The successor scheme for private homes in England, the Warm Homes: Local Grant, keeps the same shape: it provides energy performance measures and low carbon heating to low-income households living in privately owned EPC band D to G homes¹⁰. Delivered by local authorities, it provides grants for energy performance upgrades and low carbon heating to low-income households in the worst quality, privately owned homes in England²³.

In practice, a household checking eligibility needs three things in place:

• Off the gas grid (for the schemes on this page; the Warm Homes: Local Grant also covers on-grid homes)
• Low income, with the LAD and HUG schemes using a household income threshold of £30,000, or receipt of certain benefits⁴
• A poor EPC rating, band D to G, evidenced by a valid Energy Performance Certificate

The income test is what makes these grants full funding rather than partial. Where a household does not meet it, the Boiler Upgrade Scheme remains available without an income test, because it pays for the heating system rather than testing the household's means.

Funding scale: from £152 million to a £2.5 billion programme

The money behind these schemes grew in steps, and the figures are worth setting out because they show how seriously off-gas-grid retrofit has been funded.

The first phase began small. An initial £152 million of funding was granted in 2021/22 for the first phase of the Home Upgrade Grant²⁴, and the Sustainable Warmth competition documents record HUG Phase 1 as £152 million to support low-income households off the gas grid²⁵. On 21 February 2022 the government announced a further £67 million offered to successful local authorities to supplement the first phase²⁴. The final totals were recorded at £218.6 million as the scheme's total value⁸, £220 million in official statistics⁴, and £218 million in the Commons briefing¹⁶.

Phase 1 was combined with £280 million for on-grid homes from Phase 3 of the Local Authority Delivery scheme under the Sustainable Warmth umbrella¹⁶, with the LAD figure later recorded as £287 million¹⁶. The wider commitment was £950 million for the Home Upgrade Grant as part of the 2021 Spending Review, across three years²⁶, described in the Heat and Buildings Strategy as investing £950 million over 2022/23 to 2024/25²⁴. The government's manifesto commitment, as recorded by the Commons library, was to spend £2.5 billion on the Home Upgrade Grants scheme over a five-year period from 2020/21¹⁶.

The wider Warm Homes Plan, of which these schemes form part, comprises over £4.4 billion grant funding plus £600 million from the Warm Homes Fund¹¹. For a household asking whether money exists for homes like theirs, the answer at national level is clearly yes; the constraint is not the size of the pot but the route into it, which runs through local authority allocations and installer-led applications rather than a standing national queue.

What the grants pay for: low carbon heating

The heating measures funded across these schemes are consistent: heat pumps first, biomass in limited circumstances, and in the social housing fund a mandatory low carbon heating element for homes using the £20,000 offer.

The Boiler Upgrade Scheme provides upfront capital grants to support the installation of heat pumps and biomass boilers in homes and non-domestic buildings⁷. Its predecessor in policy terms, the Clean Heat Grant, was designed to provide upfront capital grants for the installation of low carbon heat systems, primarily heat pumps and in limited circumstances biomass boilers²⁷. For an oil or LPG household, the heat pump is the measure that ends the fuel delivery, and the £9,000 uplifted grant from 21 July 2026 is sized for exactly that transition³. The government's response to the Competition and Markets Authority's heating oil market study confirms the time-limited higher grant of £9,000 for eligible off-gas-grid properties replacing oil or LPG heating systems²⁸.

The Home Upgrade Grant funded both energy efficiency measures and low carbon heating²⁷, and the Warm Homes: Local Grant follows the same pattern, providing grants for energy performance upgrades and low carbon heating²³. In the social housing fund, the £20,000 on-grid offer makes a low carbon heating measure mandatory in each home, with solar PV or insulation expected alongside it so that bills do not rise⁵.

Beyond individual homes, low carbon heat networks are backed by £1.1 billion of funding across this parliament²⁹. Heat networks are mostly an urban and district-scale measure, but rural villages off the gas grid are in principle candidates, and a network would remove the individual household's fuel-buying decisions altogether, replacing them with a single connection.

What none of these grants do is fund a like-for-like oil or LPG boiler replacement. The direction of policy money is one-way: away from delivered fossil fuels. A household that wants to keep oil heating can do so, but should expect to fund it privately and to face rising regulation of the least efficient properties over the coming decade.

Energy efficiency measures and how the £15,000 is split

Heating grants work best when the fabric of the house is dealt with first, and every scheme here pairs the two. The grants pay for insulation, glazing, solar panels and ventilation alongside the heating system.

The Social Housing Decarbonisation Fund, the Warm Homes: Social Housing Fund's predecessor, was a grant funding programme for local authorities and social housing landlords in England, funding energy efficiency and low carbon heating measures³⁰. Its Wave 1 awarded around £179 million of grant funding for delivery from 2022 into 2023³¹, Wave 2 provided up to £800 million to see around 100,000 social homes upgraded²⁶, and the £62 million demonstrator project launched in 2020 to improve up to 2,000 social homes²⁶.

The off-gas-grid £15,000 in Wave 3 is not a single undifferentiated pot. It is a base cost cap of £7,500 for the home's upgrade, plus a further £7,500 available only where low carbon heating is installed in an off-grid home⁵. A social landlord retrofitting an oil-heated bungalow therefore has the headroom to do both the fabric work and the heating change in one project, which is the sequence that avoids the classic failure of putting a heat pump into a poorly insulated shell.

What the measures look like in practice is illustrated by grant-funded projects such as Active Homes in Neath, whose low carbon features included off-site manufactured timber frames and double glazing, PV panels with battery storage, and MVHR ventilation³². For an off-grid home, that combination, generation plus storage plus airtightness, is the one that most reduces dependence on bought energy, because solar with battery storage displaces electricity that would otherwise be imported at domestic rates.

Where oil and LPG households fit in rural England

Rural England is where off-gas-grid living is concentrated, and the schemes recognise it explicitly. The Home Upgrade Grant ringfenced 60% of its funding for rural local authorities². Off-gas-grid homes are also, on average, worse performers: 33.3% of off-gas-grid homes are EPC band A to C, compared with 50.1% of homes on the gas grid².

The fuel poverty figures explain the ringfence. The average fuel poverty gap for households off the gas grid was £804, over three times higher than the £222 gap for on-grid households². An earlier parliamentary inquiry found that 34% of rural households not attached to the gas grid were in fuel poverty³³. That inquiry dates from 2009 and should be read as history rather than a current rate, but the structural cause it identified, delivered fuel at unregulated prices in hard-to-heat housing, has not changed.

For these households the grants are not marginal. An oil-heated rural home that receives full grant funding for insulation and a heat pump removes, at a stroke:

• The need to buy hundreds of litres of heating oil in bulk, at prices set by world markets
• Exposure to oil price spikes of the kind that followed the 2022 crisis, when the £100 Alternative Fuel Payment was created as compensation¹³
• The standing cost and maintenance of an oil or LPG boiler, and the tank or cylinder on the property

What remains is the electricity supply for the heat pump, still bought from a supplier on a tariff. That is a real reduction in dependence, not full independence, and households weighing the change can compare the positions on help with heating oil costs and on crisis funds and hardship grants.

Scotland, Wales and Northern Ireland

England's schemes do not extend across the borders, and off-grid households in the other nations have their own arrangements.

Scotland. The Home Energy Scotland grant and loan scheme offers owner occupiers up to £7,500 for energy-efficiency improvements such as insulation and up to £7,500 for clean heating systems such as heat pumps¹¹. Remote rural and island homes get an uplift of £1,500 on both the energy efficiency and clean heating grants⁶, so a rural Scottish household could receive up to £1,500 extra for energy-efficiency improvements and up to £1,500 extra for clean heating¹¹. The scheme has offered grants up to £15,000 for heat pumps and energy efficiency measures³⁴, with the additional rural uplift of £1,500 applied to both clean heating and energy efficiency grants³⁴. The Boiler Upgrade Scheme's £9,000 uplift, by contrast, applies in England and Wales; Scottish households take the Home Energy Scotland route instead.

Wales. Green Homes Wales provides access to grant funding alongside loans for specific energy efficiency measures, reducing out-of-pocket expenses¹². Wales' Optimised Retrofit Programme planned from the outset to include off-gas-grid properties, where the challenges of decarbonisation are greater³⁵. The Welsh schemes are covered in detail on home energy grants in Wales.

Northern Ireland. Off-grid homes were brought into bill support through the Energy Bills Support Scheme Alternative Funding¹⁴, and thousands more households in Northern Ireland benefited from the £600 government help with energy bills¹⁴. Northern Ireland's retrofit landscape is covered on home energy grants in Northern Ireland.

The unevenness is worth stating plainly. The £9,000 Boiler Upgrade Scheme uplift and the Warm Homes: Social Housing Fund's off-grid £7,500 are England-and-Wales and England-only offers respectively. A household a few miles either side of a border can face materially different grant levels for the same oil boiler replacement, so the first step for any off-grid household is to check which nation's schemes apply, starting from the full guide to home energy grants.