The second round of the Heat Pump Investment Accelerator Competition opened on 21 April 2026 and closes on 5 August 2026, with funding to be provided from April 2027 through to March 20301. The competition offers £90 million to support major investment in UK-based manufacturing of heat pumps and key components1.
The scheme sits within the Carbon Budget and Growth Delivery Plan published in October 2025, which sets out policies and proposals to meet statutory emissions reduction targets up to Carbon Budget 6 (2033-2037)1. The factsheet covering heat and buildings supports the launch in January 2026 of the Warm Homes Plan1.
"The competition offers £90 million to support major investment in UK-based manufacturing of heat pumps and key components."
The government has set an aim of 450,000 heat pump installations a year by 2030, with 70% of those targeted to be manufactured in the UK by 20351. A record 125,000 heat pumps were sold in 2025, a 27% increase over 2024, with approximately 45,000 manufactured in the UK1.
Support for households buying heat pumps comes through separate schemes. The Boiler Upgrade Scheme carries £2.7bn in funding to 2030, covering £7,500 towards the cost and installation of ground and air source heat pumps, including water source heat pumps, £2,500 grants for air-to-air heat pumps and £5,000 off the cost and installation of a biomass boiler1. A £2,500 grant for heat batteries will be available once legislation and product standards are in place1. From July 2026, air-to-water and ground source heat pumps replacing oil or LPG systems will receive a grant level of £9,000 for the 2026/27 financial year1.
| Measure | Grant level |
|---|---|
| Ground, air and water source heat pumps | £7,500 |
| Air-to-water and ground source heat pumps replacing oil or LPG, from July 2026 | £9,000 for 2026/27 |
| Air-to-air heat pumps | £2,500 |
| Biomass boiler | £5,000 |
| Heat batteries | £2,500, once legislation and standards are in place |
On the supply side, manufacturers are required to meet a target of 6% of sales with heat pumps or acquire credits from 1 April 2026 under the Clean Heat Market Mechanism1. The Warm Homes skills programme will support up to 9,000 subsidised training places for installers and retrofit professionals1.
Why it matters for households
The competition is aimed at manufacturers rather than homeowners, so it does not change what a household can claim today. Its relevance is to the supply of equipment: the government's stated aim is that 70% of heat pumps installed in the UK by 2035 are made in the UK1, and the £90 million is directed at building that manufacturing capacity1. For a home weighing up a switch away from a gas, oil or LPG system, the practical questions are the grant available, the installed cost and the availability of an installer. The factsheet notes that high upfront costs and regulatory barriers can get in the way of adoption of clean energy technologies, and that heat pumps can be over three times more efficient than boilers1. It also states that relative gas and electricity retail prices are an important factor in heat pump adoption1.
What happens next
Round 2 closes on 5 August 2026, with funding provided from April 2027 through to March 20301. The £9,000 grant level for air-to-water and ground source heat pumps replacing oil or LPG systems applies from July 2026 for the 2026/27 financial year1. The Clean Heat Market Mechanism target of 6% of sales ran from 1 April 20261. The full technical specification for the Future Homes Standard was published on 24 March 2026, with standards coming into force on 24 March 2027 followed by a one-year transitional period1. A new heat network regulatory regime was introduced as of January 2026, designating Ofgem as the sector regulator, and at least 10 of the largest English towns and cities are to be supported to establish heat network zones soon after zoning regulations go live later in 20261.