The Department for Business, Energy & Industrial Strategy has a £450m pot to allocate to its boiler upgrade scheme over the next three years.

The scheme is running in England and Wales only.

The government hopes that by subsidising the installation of heat pumps it will help the industry gain critical mass and so make the technology more affordable. It is also keen to develop a UK industry and export market.

Energy minister Greg Hands said: “Thanks to the government’s boiler upgrade scheme, heat pumps using this clean, cheaper electricity will be the cheaper, obvious choice for households choosing to replace their fossil fuel boiler. It will also kick-start a British manufacturing industry that will help bring down prices even further whilst creating huge investment and job opportunities.”

Property owners will be able to get:

• £5,000 off the cost and installation of an air source heat pump
• £5,000 off the cost and installation of a biomass boiler
• £6,000 off the cost and installation of a ground source heat pump.

Octopus Energy Group chief executive and founder Greg Jackson said: “Heat pumps are up to four-times more energy efficient than gas boilers but they need to come down in price. The government’s new scheme will not only reduce the cost – often to the same price as a boiler – but it’ll kickstart an industry so that sooner or later we won’t need subsidies. The scheme is super simple and we are already seeing it help families move to cheaper green heating.”

Heat Pump Association chair Phil Hurley also welcomed the scheme. “An upfront financial incentive like this will not just help to kickstart the industry by making the technology more accessible but will also provide heating installers with the confidence boost they need to upskill, “ he said. “With the capacity to train 40,000 installers each year, we have made huge strides as an industry to improve the heat pump training pathway, and we are hopeful that this scheme will inspire the workforce to take up the opportunities available.

“Heat pumps represent a readily available and long-term solution to fossil fuel heating and the scheme is a big step towards kickstarting the mass rollout needed to grow the sector and put the UK economy on track to meet net zero.”

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