New Home Energy Scotland Grant and Loan scheme for Heat Pumps

On 2nd December, the Scottish Government announced changes to make it easier for households to apply for heat pump subsidy support.

The new Home Energy Scotland Grant and Loan scheme provides a grant which can be taken on its own or alongside an interest free Home Energy Scotland Loan. This replaces the previous Home Energy Scotland Loan and Cashback offer, where the cashback element had to be taken in tandem with an interest free loan.

With immediate effect, the key changes are:

• Grant funding for heat pumps up to £7,500. The remainder of funding requested can be taken up as an optional interest-free loan.
• Grant funding for energy efficiency improvements – up to 75% of the combined cost of the improvements and up to the maximum grant amount of £7,500.
• Homeowners in rural areas will be eligible for an extra £1,500 for both the heat pump and energy efficiency grants. This rural uplift increases the heat pump grant flat rate and the maximum limit of the energy efficiency grant to £9,000.
• Packages of measures created to support the uptake of complimentary measures that offer substantial improvement to energy efficiency and heat decarbonisation of households.

The Home Energy Scotland service, and associated funding, is managed by the Energy Saving Trust (EST) on behalf of Scotland’s new national public energy agency, Heat & Energy Efficiency Scotland. Replacing the cashback element of the previous Home Energy Scotland funding offer with a standalone grant was pledged in the 2022-23 Programme for Government.

£42 million has been committed to the initiative for the year 2022-2023 – almost double last year’s amount, indicatively sufficient for circa 5,600 heat pump installations.