The Warm Homes Plan is set to invest close to £15 billion in improving the UK's homes to cut energy bills, according to the Energy Saving Trust1. Under the plan, people on low incomes will receive fully funded government support to install heat pumps, and low and zero interest loans will be available for homeowners regardless of income1. The Energy Saving Trust said further details would follow1.
Which? reported that the plan sets out the government's strategy for supporting the transition to low carbon heating, and described a financial offer for all households regardless of tenure or income, including grants, low or zero interest loans, and products such as Property Linked Finance and Third Party Ownership agreements2. Which? put the total figure at £18 billion of support2. The Energy Saving Trust put the investment at close to £15 billion1. The two figures have not been reconciled in either account.
Which? also reported that the Warm Homes Plan revised down government targets for heat pump purchases, from 600,000 installations a year by 2028 to 450,000 installations by 20302. It said the government had begun reducing levies on electricity prices by ending the Energy Company Obligation scheme and funding 75% of the renewables obligation through general taxation2. Which? said only around 2 to 3 per cent of UK households currently heat their homes with a heat pump, and that the transition to electrified heating will ultimately affect more than 80 per cent of households that heat with gas or oil2.
On costs, the Energy Saving Trust gave a typical air source heat pump price of approximately £12,000 and around £15,000 for a ground source system1. Which? gave an average air source installation cost of around £13,0002. Both cited the Boiler Upgrade Scheme grant of £7,500 towards an air source or ground source heat pump in England and Wales1. Which? added that the grant is temporarily £9,000 for households not on the gas grid, and that the Warm Homes Local Grant offers a full grant for households on low incomes2.
"The Warm Homes Plan is set to invest close to £15 billion in improving the UK's homes to cut energy bills."
| Item | Figure | Source |
|---|---|---|
| Warm Homes Plan investment | Close to £15 billion | 1 |
| Warm Homes Plan support | £18 billion | 2 |
| Heat pump target | 450,000 installations by 2030, revised down from 600,000 a year by 2028 | 2 |
| Boiler Upgrade Scheme grant | £7,500, temporarily £9,000 off the gas grid | 1 |
| Typical air source heat pump cost | Approximately £12,000 to £13,000 | 1 |
| Typical ground source heat pump cost | Around £15,000 | 1 |
Why it matters for households
The plan's two routes differ by income. Households on low incomes are offered fully funded heat pump installation, while homeowners above that threshold are offered loans at low or zero interest rather than upfront grants1. For a household weighing up a heat pump, the sums involved are substantial: an air source system at roughly £12,000 to £13,000, or a ground source system at around £15,000, against a Boiler Upgrade Scheme grant of £7,5001. Which? found that homeowners who could afford to switch were still choosing not to, citing uncertainty over installation quality, running costs and performance rather than upfront price alone2. It also found that 67 per cent of homeowners in its Sustainability Tracker identified upfront cost as the main barrier2.
For a home's energy independence, the plan's significance lies in how many properties it reaches. Which? reported that more than 80 per cent of UK households heat with gas or oil, and that home heating accounted for 18 per cent of UK carbon emissions in 20212. The Energy Saving Trust noted that the plan also covers solar panels and batteries alongside heating measures2. Households considering their options can read the site's guide to the Warm Homes Plan, the full guide to home energy grants and schemes, and the guide to heat pump grants across the UK. Finance options are set out in the guide to interest-free loans for home energy work, and supplier-funded support in the guide to the Energy Company Obligation.
What happens next
Which? reported a commitment to consult on consumer protection issues in the summer of 20262. It also reported that the plan includes a new focus on solar panels and batteries to reduce energy bills2. The Energy Saving Trust said it would update its guidance when more is known1. No start date for the loans, and no eligibility detail beyond income for the fully funded support, has been reported1.
Sources2 cited
- Ground source heat pumps vs air source heat pumps - Energy Saving Trust, energysavingtrust.org.uk
- Beyond Affordability: Why Heat Pumps Feel Like a Gamble full report - Which?, which.co.uk