Scotland Heat Pump Grants: Home Energy Scotland Funding
TLDR: Scotland has its own heat pump funding through Home Energy Scotland, separate from the England/Wales Boiler Upgrade Scheme. You can get up to £15,000 interest-free loan plus £7,500 cashback—effectively a £7,500 grant. Combined with low-income support through Warmer Homes Scotland, eligible households may pay very little for heat pump installation. This comprehensive guide covers everything Scottish homeowners need to know.
Scotland's Unique Approach to Heat Pump Funding
If you're a Scottish homeowner thinking about installing a heat pump, you've got access to one of the most generous support packages in the UK. The Scottish Government runs its own funding schemes through Home Energy Scotland, which work differently—and in some ways better—than the Boiler Upgrade Scheme (BUS) available in England and Wales.
The headline figures are impressive: up to £15,000 in interest-free loans, £7,500 cashback on heat pump installations, and additional grants for lower-income households that can cover the full cost. For many Scottish homes, a heat pump is now genuinely affordable.
But navigating the various schemes can be confusing. There's Home Energy Scotland loans, there's cashback, there's Warmer Homes Scotland, there's the ECO scheme—it's easy to get lost in the acronyms and application processes.
This guide cuts through the confusion. We'll explain exactly what's available, who qualifies, how to apply, and what real Scottish homeowners have experienced going through the process.
Real Homeowner Experiences
Before diving into the details, here's what actual Scottish households have experienced with heat pump funding.
Ian and Morag, Inverness (4-bed detached, previously oil-heated): "We'd been dreading the cost of replacing our oil boiler—quotes for a new oil system were £4,000-£5,000, and we knew prices would only keep rising. When we looked into heat pumps, the upfront cost seemed scary—around £13,000 for the system we needed. But Home Energy Scotland changed everything. We got the £15,000 interest-free loan, then £7,500 cashback, so we're only repaying £5,500 over ten years. That's £46 a month—less than we were spending on oil. The process took about eight weeks from first call to installation. Honestly, it was much easier than expected."
Fiona, Edinburgh (3-bed Victorian flat): "I wasn't sure a flat could have a heat pump, but the Home Energy Scotland advisor talked me through the options. We went with an air-to-water system with a small outdoor unit on the balcony. Total cost was £11,500. With the cashback, I'm repaying £4,000 over seven years. The heat pump is brilliant—the flat's never been this warm. The process did take longer than expected—about twelve weeks—because the installer was busy and we had to wait for strata approval. But worth the wait."
Graham and Linda, Dundee (1960s semi-detached, on benefits): "We qualified for Warmer Homes Scotland because we're on Pension Credit. The entire heat pump installation was covered—we didn't pay a penny. They also did loft insulation at the same time. The house is transformed. Our heating bills used to be £180 a month on electric storage heaters. Now we're paying about £85. The only delay was waiting for the survey, but the installers were excellent once they arrived."
Stewart, Glasgow (2-bed tenement flat): "I paid cash for my heat pump—had some savings and didn't want a loan. But I still got the £7,500 cashback from Home Energy Scotland. The total cost was £10,800, so my out-of-pocket was only £3,300. The cashback came through about six weeks after the installation was completed. It's a straightforward process if you use an MCS-certified installer."
Understanding the Home Energy Scotland Loan
The Home Energy Scotland loan scheme offers interest-free financing for a range of energy improvements, including heat pumps. Here's how it works:
Loan Details
- Maximum loan amount: £15,000 for heat pump installations
- Interest rate: 0% (genuinely interest-free)
- Repayment period: Up to 10 years
- Monthly payments: Fixed amount based on loan size and term
- Credit check: Required, but criteria are relatively accessible
- Early repayment: Allowed without penalty
Example monthly payments:
| Loan Amount (after cashback) | 5-Year Term | 10-Year Term |
|---|---|---|
| £3,000 | £50/month | £25/month |
| £5,000 | £83/month | £42/month |
| £7,500 | £125/month | £63/month |
Because the loan is genuinely 0% interest, your monthly payment is simply the loan amount divided by the number of months in your repayment term. No hidden charges, no interest accumulating.
How the Loan Works With Cashback
This is the clever bit. The cashback is subtracted from your loan balance, not paid to you directly. So if you borrow £12,000 and receive £7,500 cashback, you only repay £4,500.
Example:
- Heat pump installation cost: £12,500
- Home Energy Scotland loan: £12,500
- Cashback applied: £7,500
- Amount you repay: £5,000
- Monthly payment (10 years): £42
The £7,500 cashback is effectively a grant—money you never have to pay back. Combined with the interest-free loan, it makes heat pumps genuinely affordable for most Scottish homeowners.
Cashback Amounts by Technology
The cashback scheme covers various low-carbon heating and renewable technologies:
| Technology | Maximum Cashback |
|---|---|
| Air source heat pump | £7,500 |
| Ground source heat pump | £7,500 |
| Water source heat pump | £7,500 |
| Hybrid heat pump system | £7,500 |
| Solar water heating (thermal) | £1,500 |
| Biomass boiler | £3,500 |
| Solar PV (up to 4kW) | £1,250 |
| Home battery storage | £1,500 |
| Electric vehicle charger | £300 |
You can combine cashback for different technologies if you're installing multiple improvements. For example, installing a heat pump (£7,500) plus solar PV (£1,250) would qualify for £8,750 in total cashback.
Eligibility Requirements
Property Requirements
- Location: Property must be in Scotland
- Ownership: You must own the property (owner-occupied or landlord installing in rental property)
- Property type: Houses, flats, and bungalows all qualify
- Existing heating: Replacing fossil fuel systems (oil, LPG, coal) or inefficient electric heating
- No EPC requirement: Unlike England's BUS scheme, there's no minimum EPC rating requirement
The lack of an EPC requirement is significant. In England and Wales, properties must have an EPC rating of D or better before qualifying for the Boiler Upgrade Scheme. This excludes many older, poorly-insulated homes that would benefit most from heat pumps. Scotland's scheme is more inclusive.
Applicant Requirements
- Age: Must be 18 or over
- UK resident: Must be a UK tax resident
- Credit check: Loan applications are subject to credit approval
- No arrears: Should not have significant arrears on existing debts
The credit check isn't as stringent as a mortgage application. Home Energy Scotland understands that many people improving their homes may not have perfect credit. As long as you have a reasonable credit history and can demonstrate ability to repay, most applications are approved.
Installer Requirements
- MCS certification: Installers must be MCS (Microgeneration Certification Scheme) certified
- Approved installer list: Home Energy Scotland maintains a list of approved installers
- Quality standards: All installations must meet relevant building regulations and quality standards
Low-Income Support: Warmer Homes Scotland
For households on lower incomes or receiving certain benefits, Warmer Homes Scotland offers additional support that can cover the full cost of heat pump installation.
Income-Based Eligibility
You may qualify for Warmer Homes Scotland if your total household income is under £35,000 and you meet at least one of these criteria:
- Your home has an EPC rating of E, F, or G
- You live in a rural area (as defined by Scottish Government criteria)
- You're over 75 years old
- You have a health condition exacerbated by cold housing
Benefits-Based Eligibility
If you receive any of the following benefits, you may automatically qualify regardless of income:
- Pension Credit (Guarantee or Savings Credit)
- Universal Credit
- Income Support
- Income-based Jobseeker's Allowance
- Income-related Employment and Support Allowance
- Child Tax Credit (income under £21,000)
- Working Tax Credit (income under £21,000)
Warmer Homes Scotland is a grant, not a loan. If you qualify, the full cost of the heat pump (and often additional insulation measures) is covered. You pay nothing.
Step-by-Step Application Process
Step 1: Contact Home Energy Scotland
Call the free helpline: 0808 808 2282
Or visit: energysavingtrust.org.uk/scotland
An advisor will discuss your situation, explain the available options, and help determine which funding you might qualify for. This initial consultation is free and doesn't commit you to anything.
Step 2: Property Assessment
Depending on your circumstances, you may have:
- Phone assessment: For straightforward cases, the advisor can gather information over the phone
- Home visit: For more complex situations or Warmer Homes Scotland applications, a surveyor visits your property
The assessment considers your current heating system, property construction, insulation levels, and suitability for different heating technologies.
Step 3: Loan Application
If you're applying for the interest-free loan, you'll complete an application form and undergo a credit check. Home Energy Scotland aims to process applications within 2-3 weeks.
Step 4: Get Installer Quotes
Once your funding is approved in principle, you'll need quotes from MCS-certified installers. Home Energy Scotland can provide a list of approved installers in your area, or you can find your own MCS-certified installer.
We recommend getting at least three quotes to compare prices and specifications. Quotes should include:
- Heat pump make and model
- System capacity (kW)
- Hot water cylinder details
- Any radiator upgrades needed
- Installation timeline
- Warranty information
Step 5: Final Approval and Installation
Submit your chosen quote to Home Energy Scotland for final approval. Once approved, the installer schedules the work. Installation typically takes 2-5 days depending on complexity.
The loan is paid directly to the installer—you don't handle the money. After installation, the cashback is applied to reduce your loan balance.
Step 6: Repayment Begins
Monthly repayments start approximately 6-8 weeks after installation. Payments are collected by direct debit on a date you choose.
Scotland vs England/Wales: Funding Comparison
How does Scottish funding compare to the Boiler Upgrade Scheme available in England and Wales?
| Feature | Scotland (Home Energy Scotland) | England/Wales (BUS) |
|---|---|---|
| Maximum benefit | £7,500 cashback | £7,500 grant |
| Loan available | Yes (£15,000 at 0%) | No government loan |
| EPC requirement | None | EPC D or better required |
| Application process | Through Home Energy Scotland | Through installer/Ofgem |
| Low-income support | Warmer Homes Scotland (full cost coverage) | ECO4 (partial support) |
| Credit check | Yes (for loans) | Not applicable (grant only) |
| Processing time | 4-12 weeks typical | 3-8 weeks typical |
Key advantages of the Scottish scheme:
- No EPC requirement: Older, less efficient homes can qualify—often the homes that would benefit most
- Interest-free loan: Spreads the cost over up to 10 years with no interest charges
- Warmer Homes Scotland: Full cost coverage for qualifying low-income households
- Personalised support: Home Energy Scotland advisors guide you through the process
Common Questions Answered
Q: Is the cashback really equivalent to a grant?
A: Effectively, yes. If you borrow £12,000 and receive £7,500 cashback, you only repay £4,500. The £7,500 is never repaid—it's essentially a grant that reduces your loan balance. The only difference from a pure grant is that you need to take out the loan first; if you pay cash upfront, you still receive the cashback as a payment after installation.
Q: What if I want to pay cash instead of taking a loan?
A: You can absolutely pay for your heat pump with cash and still receive the cashback. The £7,500 (or appropriate amount) is paid to you after the installation is completed and certified. Many homeowners prefer this if they have savings available—it's simpler and means no ongoing repayments.
Q: Can I combine Home Energy Scotland funding with other schemes?
A: Generally, you cannot combine HES cashback with the Boiler Upgrade Scheme (which is England/Wales only anyway). However, you CAN combine HES funding with Warmer Homes Scotland grants if you qualify for both. You can also access ECO4 funding for insulation measures alongside HES heat pump funding.
Q: What if I have a poor credit history?
A: Home Energy Scotland is understanding about credit issues. The loan has lower requirements than a typical bank loan. If you're declined, the advisor can discuss alternative options, including Warmer Homes Scotland if you're on a qualifying benefit. Many people with imperfect credit are still approved.
Q: How long does the whole process take?
A: From first contact to installation, expect 4-12 weeks depending on installer availability, loan processing time, and your property's complexity. Simple cases can be quicker; unusual properties or busy periods may take longer. Warmer Homes Scotland applications often take longer due to additional surveying requirements.
Q: Can landlords access this funding?
A: Yes, landlords can apply for Home Energy Scotland loans and cashback for properties they rent out. There are also specific landlord obligations and opportunities through the Scottish Government's rental sector regulations. Contact Home Energy Scotland for landlord-specific guidance.
Q: What happens if I sell the property before the loan is repaid?
A: The outstanding loan balance must be repaid when you sell the property. This is typically handled through the conveyancing process. The loan is registered against your name, not the property, so it's a personal debt rather than a mortgage-style charge.
Tips for a Smooth Application
- Call early: Home Energy Scotland advisors can get busy. Call as soon as you're considering a heat pump to start the process.
- Gather documents: Have proof of ownership, recent energy bills, and benefit letters (if applicable) ready for the assessment.
- Get multiple quotes: Three quotes minimum. Compare not just price but also equipment quality, installer reputation, and warranty terms.
- Check installer reviews: Look up potential installers on Trustpilot, Checkatrade, or local Facebook groups. Ask for references.
- Consider insulation first: If your home is poorly insulated, address this before or alongside the heat pump. Home Energy Scotland can advise on insulation funding too.
- Ask about add-ons: Solar panels, battery storage, and EV chargers also qualify for HES loans and cashback. Consider bundling if you're planning multiple improvements.
The Bottom Line
Scotland's heat pump funding through Home Energy Scotland is genuinely generous and more accessible than what's available elsewhere in the UK. The combination of interest-free loans, substantial cashback, and additional support for low-income households means that most Scottish homeowners can afford a heat pump—often for less than replacing a traditional boiler.
The key advantages: no EPC requirement (so older homes qualify), flexible loan terms, and personalised support from Home Energy Scotland advisors who guide you through every step.
If you're a Scottish homeowner considering a heat pump, the first step is simple: call Home Energy Scotland on 0808 808 2282. It's free, there's no obligation, and the advisors can explain exactly what you might qualify for based on your specific circumstances.
Given rising energy prices, the environmental benefits, and the substantial financial support available, there's never been a better time for Scottish homeowners to make the switch to a heat pump. The funding is there—you just need to access it.