Air-to-Air Heat Pump Grant UK: £2,500 BUS Explained (2026)

Air-to-air heat pumps had a long wait for government recognition. While their hydronic cousins — the air-to-water heat pumps that feed radiators and underfloor heating — have received Boiler Upgrade Scheme (BUS) grants since 2022, air-to-air systems were left out entirely. That changed in 2025: the government expanded the BUS to include air-to-air heat pumps, with a £2,500 grant available in England and Wales. If you've been eyeing a split-system heat pump for a flat, a hard-to-heat room, or a home where wet-system installation isn't practical, this guide covers everything you need to know.

What is the Boiler Upgrade Scheme (BUS)?

The Boiler Upgrade Scheme is a government grant programme administered by Ofgem that reduces the upfront cost of installing low-carbon heating. It replaced the Renewable Heat Incentive in 2022 and operates on a simple model: you engage an MCS-certified installer, they apply for a voucher on your behalf, and the grant is deducted from your installation bill before you pay. You never handle the money directly.

The scheme is funded through to 2029/30 with a total budget of £2.7 billion, supporting the government's target of over 450,000 heat pump installations per year by 2030. As of 2026, it covers England and Wales only — Scotland and Northern Ireland have separate schemes.

BUS grant levels at a glance (2026)

The current grant amounts under the BUS are:

Air-to-water, ground-source and water-source heat pumps: £7,500
Air-to-air heat pumps (residential only): £2,500
Heat batteries (for central heating): £2,500
Biomass boilers (rural, verified): £5,000

Air-to-air systems receive a lower grant than hydronic heat pumps, reflecting their lower installed cost and the fact that they cannot replace a full wet heating system. They are also restricted to residential properties — the £7,500 grants cover both homes and commercial buildings.

What is an air-to-air heat pump — and how does it differ from air-to-water?

An air-to-air heat pump moves thermal energy between outdoor air and indoor air directly — there is no water circuit involved. In practice this means it works almost identically to a modern split-system air conditioner: one unit sits outside, one or more indoor units mount on internal walls, and refrigerant pipes connect the two. In heating mode, the outdoor unit extracts heat from ambient air (even at temperatures as low as −15 °C on modern units) and the indoor units blow warm air into the room.

The key difference from an air-to-water heat pump is that there are no radiators, no underfloor heating pipes, and no hot water cylinder involved. Heat is delivered as warm forced air, not as hot water circulating through your existing heating system.

What air-to-air heat pumps can and cannot do

Being clear about this matters before you commit:

Can do: heat rooms efficiently at a Coefficient of Performance (CoP) of 3–5 in mild weather; provide cooling in summer without a separate air conditioning system; work well in well-insulated properties without a wet heating system; heat individual rooms or zones selectively.
Cannot do: provide domestic hot water — you will still need a separate boiler, immersion heater, or solar thermal system for your hot water cylinder. This is the most important limitation to understand before buying.
Cannot do: connect to radiators or underfloor heating pipework. If your home has a gas boiler feeding radiators, an air-to-air system does not replace it for the wet circuit — it sits alongside it (or fully replaces your heating if the air-delivery is sufficient for your property).

For homes that are well insulated and where the occupants are happy to heat via warm-air delivery (common in new builds, flats, and well-sealed modern homes), air-to-air is a genuinely cost-effective and flexible option. For older homes relying on a full wet heating system for hot water and radiators, an air-to-water heat pump or a hybrid system is likely the better fit.

Why did air-to-air heat pumps become eligible for BUS in 2025?

The government expanded BUS eligibility to air-to-air systems as part of its Warm Homes Plan, recognising them as “particularly suitable in smaller properties, cheaper to install than a hydronic heat pump and able to provide cooling.” The Warm Homes Plan acknowledged that the previous restriction to hydronic systems was leaving a significant segment of potential installations uncatered for — particularly flat-dwellers, small homes, and properties where routing water pipework would be prohibitively disruptive or expensive.

The expansion was accompanied by a separate simplification: Ofgem removed the requirement for a new Energy Performance Certificate (EPC) under BUS, cutting one of the more bureaucratic hurdles from the application process.

Who is eligible for the £2,500 air-to-air grant?

To qualify, you need to meet the following conditions:

Property location: the property must be in England or Wales (Scotland and Northern Ireland have their own separate grant programmes).
Property type: must be a residential property. The air-to-air BUS grant does not extend to commercial buildings (unlike the £7,500 hydronic grant).
Existing heating system: you must currently heat with a fossil fuel system — gas, oil, LPG, or electric resistance heating. The scheme is designed to replace fossil fuel heating, not to upgrade an existing low-carbon system.
MCS-certified installer: the installer carrying out the work must hold MCS certification for heat pump installation. Only an MCS-certified installer can apply for and redeem BUS vouchers on your behalf.
No prior BUS grant on the property: each property can receive one BUS grant. If a previous owner already claimed, the property is ineligible.

Landlords and social housing providers can also apply, provided the other eligibility conditions are met.

How the application process works

The BUS is entirely installer-led — you do not apply directly to Ofgem or the government. The process runs as follows:

Get quotes from MCS-certified installers. Use the MCS Certified installer search at mcscertified.com to find registered heat pump installers in your area. Confirm they cover air-to-air systems specifically, as not all MCS-certified heat pump companies install air-to-air (most specialise in air-to-water).
Installer assesses and quotes. The installer surveys your property, designs the system, and provides a final quote. Under the simplified rules introduced with the Warm Homes Plan, installation can now proceed within three days of agreeing a final quote.
Installer applies for the voucher. Once the quote is agreed, the MCS-certified installer submits a voucher application to Ofgem on your behalf. Ofgem issues the voucher (valid for three months).
Installation and redemption. The installer completes the work and redeems the voucher directly with Ofgem. The £2,500 is deducted from your invoice — you pay the net amount.

You do not receive a cheque or bank transfer; the grant reduces what you owe the installer. Keep a copy of the MCS certificate the installer issues on completion — you will need it for warranties, any future EPC updates, and to demonstrate system compliance.

How much does an air-to-air heat pump cost after the grant?

Installed costs for a single-room split-system in a typical UK home run from around £1,500 to £3,500; multi-room multi-split systems covering a whole property typically range from £4,000 to £8,000 or more, depending on the number of indoor units and installation complexity. These are illustrative ranges — your actual quote will depend on the property, the chosen brand, and local labour rates.

After the £2,500 BUS grant, a single-room system could cost as little as £0–£1,000 net (if the installed cost falls below or near £2,500), while a whole-home multi-split might cost £1,500–£5,500 net. The grant makes the most meaningful difference on lower-cost installations, where it can cover the majority of the bill.

Contrast this with air-to-water systems: a typical air-to-water installation runs £8,000–£15,000 before the £7,500 BUS grant, leaving £500–£7,500 to pay. Air-to-air is significantly cheaper to install, which is why the grant level is set lower — the net cost to the homeowner should be in a similar ballpark for simple installations.

Is air-to-air right for my home?

Air-to-air heat pumps suit a specific type of property best. Use this as a rough guide:

Good fit: modern well-insulated flat or apartment; new-build home without a wet heating system; home already using electric panel heaters or air conditioning for climate control; second home or holiday let where flexible zone heating matters; property where routing wet pipework would require major disruption.
Poor fit: older home relying on gas boiler + radiators for both space heating and hot water; properties with poor insulation where high heat output is needed; anyone who wants a single system to cover both space heating and domestic hot water.

If your home falls into the “poor fit” category but you still want to reduce gas use, a hybrid heat pump — which pairs an air-to-water unit with your existing boiler — is likely the more practical route. If you want to explore the full range of air source options first, our best air source heat pumps UK guide covers the leading models across both air-to-water and air-to-air categories.

Scotland and Northern Ireland: separate schemes

The BUS runs in England and Wales only. If you are in Scotland, the relevant scheme is the Home Energy Scotland Loan (interest-free finance, not a grant) administered by Energy Saving Trust on behalf of the Scottish Government. Northern Ireland has its own Reconnect programme. Neither of those schemes is administered by Ofgem, and the rules and amounts differ significantly — check the relevant programme directly if you are outside England and Wales.

Key things to check before you commit

Confirm the installer is MCS certified for air-to-air heat pumps — the MCS database lists which technologies each installer is certified for; not all are authorised for air-to-air.
Understand the hot water gap — plan how you will heat domestic hot water before signing the installation contract. Options include a hot water heat pump (separate unit), an immersion heater, or retaining an existing boiler solely for hot water.
Get at least two quotes — grant availability tends to push installer prices up slightly; competitive quoting is essential.
Check the voucher validity window — BUS vouchers are valid for three months from issue; ensure your installation timeline fits within that window.