Which? published a policy report in September 2025 setting out a framework for financing low carbon home heating, described in its subtitle as "A framework for ensuring safe and fair consumer choices"1. The consumer body assessed current financial products against eight tests and made recommendations to government and business1.
It puts the average cost of a heat pump installation at £13,500, noting costs vary significantly by property type1. It also states that around 3% of UK households currently have a heat pump and that 33% of UK homeowners say they would or might consider installing one1.
The eight tests cover a clear regulatory framework; access to finance for different groups of homeowners; good quality information and advice; good quality products, installations and services; clear and fair contract terms; clear options and pricing of bundled services; protection in the event of a default; and effective handling of complaints and disputes1.
Among the recommendations, Which? calls on the government to introduce mandatory certification of heat pump installers, and says that until this is introduced financial providers should require all installations they fund to be carried out by MCS certified installers1. It recommends mandatory key information sheets to support comparison of financial packages, and says comparison sites and brokers should be transparent about how much of the market they cover and any commissions they receive1.
On third party ownership (TPO) products, the report notes that under a consumer hire (leasing) agreement the consumer does not own the product at the end, liability is defined by the contract with no limit, and consumers do not have the right to return the product within the first 18 months1. It states that consumer hire agreements should not be allowed in this market until the government has effectively addressed these gaps1. On Heat as a Service (HaaS), it says:
"Heat as a Service options should not be allowed until the government has effectively addressed the competition and choice issues that arise from consumers being locked in to long agreements for tariffs and other services."
The report states that the heat pump remains the property of the third party for the duration of a TPO agreement, which may be a period of ten to twenty years1. It notes that the government has proposed that tariffs within TPO agreements should be billed in kWh to allow comparison and that consumers must be free to change tariffs, and that in the recent consultation on BUS eligibility the government proposed that providers should be prohibited from repossessing or remotely decommissioning the system in the event of a default1. It adds that no similar proposals currently exist for maintaining choice under HaaS agreements1.
On default and redress, the report says repossession would disconnect a household from its source of heating, and that all businesses financing heat pump installations should be subject to OFGEM licensing conditions or equivalent rules covering the process before disconnecting a customer1. It says any future reform of the Consumer Credit Act, including in relation to Green Finance, should maintain protections such as Section 75, which enables a consumer who has purchased a product or service using a credit product to make a claim of up to £30,000 against the financial provider1.
Why it matters for households
For a household, the difference between a loan, a TPO agreement and a HaaS subscription is not only monthly cost but who owns the equipment, what happens if payments stop, and whether the tariff or service provider can be changed1. The report states that under consumer hire agreements liability is defined by the contract with no limit, and that consumers cannot return the product within the first 18 months1. It also states that consumers should not be locked into tariffs or services such as optimisation, repair and maintenance for more than two years where heat pumps are sold as a bundle, and should have a choice of providers without invalidating guarantees1. On energy independence, the report's concern is that long contracts and bundled services can limit a household's control over the equipment and the tariff it runs on, which is why it recommends restrictions until competition and choice issues are addressed1.
What happens next
The report is a set of recommendations to government and business rather than a change in the rules. It notes that the government has proposed tariff billing in kWh within TPO agreements, freedom to change tariffs, and a prohibition on repossessing or remotely decommissioning systems in the event of a default under the BUS eligibility consultation1. It states that no similar proposals currently exist for maintaining choice under HaaS agreements1. The report also refers to a government commitment to deliver an overhaul of the consumer credit regime and to move at pace to implement real change1. No dates for implementing the report's recommendations have been reported1.
Sources1 cited
- Financing low carbon home heating, media.product.which.co.uk