Sources speaking to the Guardian indicated that heat pump subsidies will be cut back significantly in efforts to make savings for the government- but industry voices have warned it will only slow down the transition from gas boilers
The report comes from sources briefed on the upcoming budget, which has allegedly seen a flurry of last minute revisions and controversial moves by chancellor Rachel Reeves.
Energy efficiency levies will be taken off bills and instead funded through the existing Warm Homes plan. This will restrict heat pump subsidies from all but those receiving specific benefits, drastically reducing the number of candidates and the consequential cost on the government.
Heat pumps versus gas boilers
Some have supported the change, arguing that the subsidies were mostly going to middle-class households that could have afforded the expense of having a heat pump fitted. The highest grant available was £7,500 and the average cost of heat pump installation as of July 2025 was £12,500.
Despite the energy efficiency of heat pumps versus traditional gas boilers, this hefty installation cost is believed to have put many customers off. A new boiler, by comparison, costs around £3000.
Several voices in the energy sector have raised concerns that reducing the grant support for heat pumps will slow an already sluggish rate of uptake amongst the population, further slowing the UK’s overall energy efficiency efforts.
The plans have garnered a poor reception so far
Sam Alvis, the head of energy and environment at the Institute of Public Policy Research thinktank, said to the Guardian: “The urge to get bills down is the right one, everything should be on the table.”
He added: “The risk here is that, like winter fuel payments, the additional benefit of cutting support schemes for clean technology isn’t noticed by the majority, but really is by those that lose out.”
Leo Vincent, a senior policy adviser at the E3G thinktank, also commented: “If this is really what the government is planning, it is robbing Peter to pay Paul. This is a disastrous sticking plaster ‘solution’ that would let down working families across the country who need the security of predictable and low bills.
“It would leave Britain vulnerable to the whims of fossil fuel despots, put thousands of jobs at risk and blow a hole clean through the UK’s plans for climate action.”
At the time of writing, the Treasury has yet to comment on the reports.
The post Heat pump subsidies to be cut in upcoming budget appeared first on Planning, Building & Construction Today.
