If you’re considering trading in your gas boiler for an air-source or ground-source heat pump, you can expect an environmentally friendly, low-carbon heating system and reduced energy bills.

Many people worry about the outright costs of heat pump installation, but there are schemes available that will help you save money.

The Scottish Government is actively advocating for measures that will lower carbon emissions, and households everywhere can reduce the costs of transitioning to renewable energy sources.

Discover which funding you’re entitled to in our comprehensive guide.

Home Energy Scotland Grant and Loan

Perhaps the most popular funding option in Scotland is the Home Energy Scotland Grant and Loan, which is available for eligible households.

You can access up to £7,500 towards the costs of a ground or air-source heat pump, resulting in significant savings on installation costs. Rural households may be able to receive up to £9,000 depending on their unique circumstances.

In addition to the grant, an interest-free loan scheme is in place to ensure you can fund energy efficiency improvements. The loan is worth up to £7,500, giving you a maximum total of £15,000.

Eligibility criteria

The Home Energy Scotland Grant and Loan is available for homeowners with existing properties in Scotland. It should also be your primary residence; you must own the property. The grant was available for new-build properties in the past, but this is no longer the case for 2025.

We all know that Scotland’s climate can be unforgiving, and rural households can suffer from extreme cold in winter. The Rural Uplift provides additional financial support for households.

If you’re unsure of whether your property is eligible for the uplift, we recommend reviewing the Urban Rural Classification guidelines.

How to apply for funding

If you’d like to receive the grant, please submit your application to the Home Energy Scotland Grant and Loan website. Once your application is reviewed, you’ll receive a notification of whether your application is accepted or if more documentation is required.

Warmer Homes Scotland

The Scottish Government also offers the Warmer Homes Scotland initiative, which is designed to help households manage their energy costs and heat their properties.

While the Home Energy Scotland Grant and Loan is only available to homeowners, private tenants can receive funding to ensure their property is warmer and easier to heat. If you’re eligible, you’ll receive up to £10,000, which will go towards funding energy efficiency measures.

Warmworks manages the scheme and will decide on the amount you receive based on a survey of your property. The scheme covers:

  • Installing insulation (roof, walls, and flooring)
  • Draught-proofing measures
  • Energy-efficient heating systems should be installed, including heat pumps, modern boilers, and storage heaters.

Eligibility criteria

To apply for the scheme, you must live in the property, and it must be your primary residence.

While tenants can apply, they’re only eligible if renting from a private sector landlord. Warmworks will evaluate whether the property has a low Energy Performance Certificate rating.

The homeowner or tenant must also be over 75, classed as terminally ill, or in receipt of benefits. If you’ve received financial support from the scheme within the past five years, you won’t be able to apply.

How to apply

It’s easy to apply for the Warmer Homes grant by contacting Home Energy Scotland. An advisor will assess your eligibility and refer your case to Warmworks.

It’s important to remember that every application is judged on a case-by-case basis, and there’s no guarantee that you’ll receive funding.

ECO4 Scheme Scotland

The Energy Company Obligation (ECO) is a UK scheme that households in Scotland can apply for. It’s currently in place until 2026 and offers funding for fuel-poverty homes.

If you’re struggling to meet your household’s heat requirements and are on a low income, you may be able to receive funding.

What makes the ECO4 initiative unique is that it takes a “whole house” approach instead of offering funding for one improvement. So, the package could include the installation of clean heating systems, insulating the property, and anything else that will improve its EPC rating.

Eligibility criteria

There are two groups of criteria that will determine your eligibility for the scheme:

  • Help to Heat: If you’re in receipt of a means-tested benefit, including Jobseeker’s Allowance, Universal Credit, and Income-Related ESA, you can receive financial support.
  • ECO Flex: Homes with a low EPC rating or combined income under £31,000 may be entitled to support under the ECO Flex scheme. However, your local authority will decide whether your property is eligible. Some people may receive priority funding if they have a health condition that’s worsened by cold weather.

How to apply

You’ll need to find a renewable energy installation service that participates in the ECO4 scheme.

Once the installer surveys your property, they’ll be able to determine whether you can receive funding.

Your application will be reviewed, and the installer can then begin making energy-efficient changes.

0% VAT

To make energy efficiency improvements more affordable, Scottish homes can take advantage of the 0% VAT scheme, which is currently in place until 2027.

This means you won’t have to pay tax on energy-saving materials for your property.

While many people associate it with solar panels, the 0% VAT scheme can also save money on heat pump installations, as you won’t pay tax on the following:

  • Installing an air or ground-source heat pump
  • Ancillary works, including radiator upgrades, new pipes, and minor building work.

While this initiative won’t save thousands, it can still result in lower costs and help reduce installation fees.

Explore your funding options today

Installing a ground or air-source heat pump prepares you for a greener future where you can save a lot of money. If you’d like to access grant or loan funding, IMS Heat Pumps is here to support you.

We’ve performed hundreds of heat pump installations across Scotland and guarantee our customers benefit from professional service.

Please contact us today to discuss your needs and see how much money you can save.