If you’ve been confused about what the government means when it talks about heat pumps, you’re probably thinking of the air-to-water kind — the one that replaces your boiler, heats water, and sends it around your radiators or underfloor heating. That’s the system the £7,500 Boiler Upgrade Scheme grant has been supporting since 2022. But from April 2026, there’s now a separate £2,500 grant for a different kind of heat pump entirely: air-to-air.
The difference matters, because the eligibility rules are completely different, the technology works differently, and the homes that actually qualify are a specific subset. Here’s what you need to know.
What Is an Air-to-Air Heat Pump?
An air-to-air heat pump works like a modern air conditioning unit — because fundamentally, it is one. It takes heat from the outside air and transfers it into your home (or reverses the process to cool in summer). The heat is distributed via a wall-mounted indoor unit that blows warm or cool air into the room. You’ve probably seen the same technology in hotel rooms or newer office buildings.
The critical difference from an air-to-water heat pump: it doesn’t heat water. No hot water cylinder, no wet radiator system, no connection to your domestic hot water supply. It heats (and cools) the air in a room directly. That makes it simpler to install and cheaper as a standalone product, but it also means you’d still need a separate water heater for showers and taps unless you’re getting it as one part of a broader system.
In the UK, air-to-air systems are sometimes called “split systems” or just “air source heat pumps” in the wider sense — though strictly speaking, ASHP usually refers to air-to-water systems in UK energy policy contexts. Worth knowing if you’re reading grant guidance from different sources.
The New £2,500 Grant: Who Actually Qualifies
This is where most people who get excited about the grant hit a wall. The £2,500 air-to-air grant introduced in April 2026 comes with a specific and fairly narrow eligibility requirement: it’s only available to homes that are currently heated by direct electric heating systems.
That means:
- Storage heaters
- Electric panel radiators
- Direct electric underfloor heating
- Electric ceiling heating panels
If your home currently runs on gas, oil, LPG, or even a wood-burning system as your primary heat source, you do not qualify for this grant. You’d instead look at the £7,500 BUS grant for an air-to-water heat pump.
The reason for this restriction is that the grant is designed to help homes that are already on expensive electricity-based heating to switch to a more efficient form of electric heating. An air-to-air heat pump is typically three to four times more efficient than a direct electric heater — meaning it delivers the same amount of heat using roughly a quarter of the electricity. For households on storage heaters, the running cost reduction can be significant.
If you’re not sure what counts as “direct electric heating”, a good rule of thumb is: does your heating come from electricity and produce heat without any water loop or combustion? If yes, you probably qualify. If in doubt, the MCS-certified installer assessing your property will confirm.
How the Installation Works
Air-to-air heat pump installation is faster and less disruptive than replacing a boiler and radiator system. A standard single-room installation takes one to two days. A multi-room system with multiple indoor units takes longer, but there’s no draining down of a wet heating system, no new pipework to radiators, and no hot water cylinder to fit.
The system consists of an outdoor unit (the compressor, mounted on an external wall) and one or more indoor units. Each indoor unit handles one zone or room. Multi-split systems allow a single outdoor unit to serve multiple indoor units across different rooms.
MCS certification is required for the installer to qualify for the grant. The Microgeneration Certification Scheme is the UK quality standard for small-scale renewables and low-carbon technologies, and any installer applying for the grant on your behalf must be registered. You can check MCS registration at mcscertified.com.
The grant is administered similarly to the existing BUS: your installer applies after installation, and the payment goes to them rather than directly to you, with the grant deducted from your quoted price. There shouldn’t be any upfront payment of the grant amount.
Is It Worth It If You Don’t Qualify for the Grant?
If you have gas heating and don’t qualify for the £2,500 grant, air-to-air still has a use case worth considering: cooling. The UK is getting warmer summers, and the proportion of homes that get uncomfortably hot for extended periods has risen significantly. A heat pump split system is vastly more efficient than portable air conditioning units (which are genuinely terrible — noisy, expensive to run, and barely effective).
A single-room air-to-air installation without any subsidy costs roughly £1,500–£2,500 for supply and installation, depending on the unit size and your location. It’ll both heat the room in winter as a supplement to your main system and cool it in summer. For a home office or a bedroom that gets unbearable in July, that’s a reasonable spend even without a grant.
The efficiency advantage applies year-round. Running an air-to-air heat pump costs less than running an electric heater at any given outside temperature above about -5°C, which covers effectively all of the UK. For homes already on electricity-based heating, the payback on the grant-eligible installation can be short: often three to five years, sometimes less if electricity prices stay where they are.
The government has said air-to-air grants are a new first-ever offering under the Warm Homes Plan. Given that many of the UK’s hardest-to-heat homes are those on storage heater systems — often flats, older council properties, and properties without gas connections — getting these households to more efficient electric heating is a meaningful step even if it’s not the flagship heat pump story.