A trial of 8,016 UK homeowners by the innovation charity Nesta and the Behavioural Insights Team (BIT) found that interest-free loans and lower running costs each increase the number of people who say they would choose a heat pump over a gas boiler, and that combining the two triples stated demand1. The results were published on 15 June 2022, with the full report following on 16 June 20221.
With no incentives, 12% of homeowners in the trial said they would choose a heat pump over a gas boiler1. The government's Boiler Upgrade Scheme, a £5,000 subsidy launched in May 2022, raised that to 21%1. Interest-free loans repaid over six or 12 years produced the same nine percentage point increase, to 21%1. Under the loan, participants were told they would not pay the upfront cost but would pay £75 a month, for either six years if they also received the £5,000 subsidy or 12 years if they did not1.
Cutting running costs so that a heat pump costs £40 a month less to run than a gas boiler increased the number choosing a heat pump by seven percentage points1. The baseline scenario showed a heat pump costing £5 per month more than a gas boiler, at £80 against £75; the lower running cost scenario showed a heat pump at £60 against £100 for a gas boiler1. Nesta said this shift could be achieved by moving the levies on electricity bills to gas bills1.
Combining the two measures produced a 24 percentage point increase, with more than one in three, or 36%, saying they could choose a heat pump1. The report puts the combined effect of an interest-free loan and lower running costs at +24 percentage points, and of a lower installation cost plus lower running costs at +30 percentage points, the largest effect found2. Reducing installation cost from £10,500 to £5,500 alone gave +10 percentage points, and cutting installation time from ten days to three days had no measurable effect2.
| Scenario | Stated heat pump choice |
|---|---|
| No incentives | 12% |
| £5,000 subsidy | 21% |
| Interest-free loan | 21% |
| Running costs £40 a month lower | +7 percentage points |
| Loan and lower running costs combined | 36% |
"This research shows that, if the government gets the support right, there is a significant appetite for switching to heat pumps. Interest free loans are appealing to homeowners, easy to set up, and much cheaper than subsidies."
Nesta noted that the Treasury has so far allocated enough money for just 30,000 grants a year, and that the 21% figure under the subsidy is equivalent to over 350,000 homes choosing a heat pump each year, ten times more than the number installed last year1. The report cautions that stated intent in an online experiment is a likely upper bound of real behaviour1. The trial ran between 11 March and 5 April 20222.
Why it matters for households
The trial tested stated intentions, not installations, so the figures describe what homeowners said they would do in a hypothetical situation where their boiler needed replacing1. For a household weighing up heat pumps against a gas boiler, the results point to two cost barriers that shape the decision: the upfront price and the running cost. The running cost comparison is central, because the baseline in the trial had a heat pump costing £5 a month more to run, while the lower cost scenario had it £40 a month cheaper1. The report states that switching environmental levies from electricity to gas tariffs could deliver that shift2.
The Boiler Upgrade Scheme provides £5,000 towards a heat pump, and the trial found it raised stated choice from 12% to 21%1. The report notes that an interest-free loan performed comparably to the subsidy in driving stated uptake, and that financing is cheaper for government to service than subsidies2. For a home's energy independence, the trial's energy security message increased intent to adopt by five percentage points, alongside a message on effective heating2. The report links electrification of heat to the wider energy security narrative, describing heat pumps as cleaner, cheaper in the long run and the best way to use domestic energy2.
What happens next
The report recommends that policymakers consider financing options and reduce running costs, and that communications highlight personal benefits and link heat electrification to energy security2. No further trial or follow-up has been reported.