£9,000 heat pump grant for oil and LPG homes: who qualifies
Off-gas-grid homes replacing oil or LPG can get £9,000 off a heat pump until 31 March 2027. Who qualifies, what it costs after the grant and a timeline to claim.
Numbers checked against official sources on 7 October 2026
In 30 seconds
- Off-gas-grid homes in England and Wales that heat with oil or LPG can get £9,000 off an air source or ground source heat pump, up from £7,500.
- The higher rate started on 21 July 2026 and Ofgem says it is available until 31 March 2027.
- Nesta estimates a typical home switching from oil could pay about £2,500 to £3,600 after the grant, which can be less than a new oil boiler (£3,500 to £5,500).
- Nesta also estimates savings of over £650 a year on energy bills for a medium-sized home moving from oil to a heat pump.
Homes that heat with oil or LPG have had a rough few years: prices have swung with world events, the tank has to be filled in advance, and many oil boilers are old. In 2026 the government raised the heat pump grant for these homes by 20%. For many rural households this changes the sums completely, because a heat pump can now cost less upfront than replacing the oil boiler. Here is who qualifies, what it costs and how to claim before the deadline.
On this page
What the government announced
In a press release on 26 June 2026 the government confirmed that the Boiler Upgrade Scheme grant would rise from £7,500 to £9,000 for households on heating oil in England and Wales, to help rural homes move away from oil (GOV.UK). It said leaflets would go to around 200,000 eligible homes. The official grant notice extended the same £9,000 rate to homes replacing LPG.
Ofgem, which runs the scheme, says the £9,000 rate for eligible off-gas-grid properties is available until 31 March 2027.
Who gets £9,000, and who gets £7,500
The amount depends on the system you install and the fuel you are replacing. From the official notice of grant values, for an off-gas-grid property:
| Replacing… | Air-to-water or ground source | Air-to-air |
|---|---|---|
| Oil heating | £9,000 | £2,500 |
| LPG heating | £9,000 | £2,500 |
| Coal heating | £7,500 | £2,500 |
| Electric heating (not a heat pump), e.g. storage heaters | £7,500 | £2,500 |
| A fossil fuel hybrid system | £7,500 | £2,500 |
All the usual scheme rules still apply: you must own the property, it must be in England or Wales, and an MCS-certified installer applies for you. Our full Boiler Upgrade Scheme guide covers eligibility and the application step by step.
What it costs after the grant
Nesta, the innovation charity, analysed what the higher grant means for oil-heated homes (Nesta, April 2026). Its estimates:
- after the £9,000 grant, a heat pump would cost about £3,600 for a detached house and about £2,500 for bungalows, semi-detached and terraced homes;
- replacing an oil boiler like for like typically costs £3,500 to £5,500.
In other words, for many homes the heat pump is now the cheaper option upfront, not just the greener one. Your real quote depends on your home: larger, older rural houses often need bigger systems and more radiator changes.
Running costs: why oil homes save the most
Nesta estimates that a medium-sized home switching from an oil boiler to a heat pump could save over £650 a year on energy bills. Oil homes tend to gain more than gas homes for three reasons:
- heating oil and LPG have generally cost more per unit of heat than mains gas;
- oil boilers in rural homes are often older and less efficient;
- you no longer need to buy fuel in bulk in advance or maintain a tank.
Satisfaction is high too: in Nesta’s survey of 1,376 heat pump users, 83% of those who had switched from oil were satisfied.
Your saving depends on your prices. Heating oil prices move with world markets, and the saving is larger when oil is expensive. Electricity is also VAT-free only until 31 March 2027. Ask installers to show the running cost on your actual oil use, in litres per year.
The 31 March 2027 deadline
Two things change on 31 March 2027: the £9,000 rate is due to end, according to Ofgem, and so does 0% VAT on installing heat pumps, which goes to 5%. A heat pump for a rural home needs a survey, a design, sometimes radiator changes and, under the scheme rules, installation within 120 days of the grant application. Our suggested timeline:
- Now to November 2026: contact two or three MCS-certified installers and book surveys.
- By December 2026: compare quotes using our installer checklist and choose one.
- January to February 2027: installation, with a buffer before the deadline.
Installers in rural areas can be booked up, and late winter is a busy time. Starting in the autumn leaves room for delays.
What happens to the oil tank?
Ask your installer whether removing or decommissioning the old oil tank is included in the quote. If not, it is a separate job: tanks need emptying and safe removal. Plan to run your remaining oil down before the switch so you don’t pay for fuel you won’t use.
How does a heat pump compare with your boiler? See the full guide to heat pump prices in 2026.
Heat pump costsFrequently asked questions
Who can get the £9,000 heat pump grant?
Owners of off-gas-grid properties in England and Wales that are replacing oil or LPG heating with an air-to-water or ground source heat pump, through an MCS-certified installer.
When does the £9,000 grant end?
Ofgem says the £9,000 rate is available until 31 March 2027. After that the standard grant is £7,500 unless the government extends it.
Can I get £9,000 if I replace electric storage heaters?
No. Replacing electric heating that isn’t a heat pump gets £7,500. The £9,000 rate is for oil and LPG.
Is a heat pump really cheaper than a new oil boiler?
Often, after the £9,000 grant. Nesta estimates £2,500 to £3,600 for a heat pump against £3,500 to £5,500 for an oil boiler replacement. Get quotes for both to compare for your home.
Does the £9,000 grant apply in Scotland?
No. The Boiler Upgrade Scheme covers England and Wales only. Scotland has separate support through Home Energy Scotland.
