Introduction
With energy costs rising and climate concerns growing, improving your home's energy efficiency has never been more important. Fortunately, the UK government offers various grants and incentives to help homeowners upgrade their properties, reduce energy bills, and lower their carbon footprint.
From funding for insulation and low-carbon heating systems to financial incentives for generating renewable energy, there are several schemes available in 2025 to support homeowners in making their homes more energy efficient. Understanding these grants can help you access the financial support needed to improve your property’s sustainability.
In this guide, we will explore the key energy efficiency grants and incentives available in the UK for 2025, who is eligible, and how to apply. Whether you're looking to install a heat pump, upgrade your insulation, or invest in solar energy, this guide will help you navigate the best options for your home.
Why Energy Efficiency Matters
Improving your home's energy efficiency offers a range of benefits, from reducing your monthly bills to helping combat climate change. By making small upgrades or taking advantage of government grants for larger improvements, homeowners can enjoy long-term savings and a more comfortable living environment.
Lower Energy Bills
One of the most immediate benefits of energy efficiency is cost savings. Well-insulated homes, efficient heating systems, and smart energy management can significantly cut down on wasted energy, reducing utility costs year-round.
Reduced Carbon Footprint
Homes account for a large portion of the UK’s carbon emissions. By switching to renewable energy sources, improving insulation, and upgrading heating systems, homeowners can contribute to the UK’s net-zero targets while lowering their own environmental impact.
Increased Property Value
Energy-efficient homes are more attractive to buyers. A better Energy Performance Certificate (EPC) rating can increase property value and make homes more desirable in the housing market.
Government Support & Incentives
With various government grants and incentives available, there’s never been a better time to make energy-efficient improvements. Many of these schemes can cover a significant portion of the costs, making upgrades more accessible and affordable.
Government Energy Efficiency Grants and Schemes
The UK government offers a variety of grants and financial incentives to help homeowners improve their property’s energy efficiency. These schemes are designed to make it more affordable to upgrade heating systems, enhance insulation, and even switch to renewable energy sources.
Whether you're looking to replace an old boiler, install better insulation, or invest in greener technology, there’s likely a scheme available to help with the costs. Below, we explore the key energy efficiency grants and schemes available in 2025.
Boiler Upgrade Scheme (BUS)
Replacing an old gas boiler with a more energy-efficient system can significantly lower your energy bills. The Boiler Upgrade Scheme (BUS) provides grants to help homeowners install low-carbon heating systems, such as:
- Air source heat pumps
- Ground source heat pumps
- Biomass boilers (for eligible rural properties)
Under this scheme, you could receive up to £7,500 towards the cost of a heat pump, making it a great time to consider upgrading your home heating system.
Energy Company Obligation (ECO4)
If you’re on a low income or receive certain benefits, you may qualify for free energy-saving improvements through the Energy Company Obligation (ECO4) scheme. This government initiative requires major energy suppliers to help households improve their energy efficiency.
Under ECO4, you could get free or heavily subsidised improvements, such as:
- Loft, cavity wall, or solid wall insulation
- Boiler replacements or repairs
- First-time central heating installation
- Smart heating controls
This scheme is designed to support low-income and vulnerable households, ensuring everyone has access to a warmer and more efficient home.
Great British Insulation Scheme (GBIS)
With energy prices continuing to fluctuate, insulation is one of the most effective ways to cut energy costs. The Great British Insulation Scheme (formerly ECO+) helps households upgrade their insulation at a reduced cost or even for free.
If your home has poor insulation and high heating costs, you could qualify for funding towards:
- Loft insulation
- Cavity wall insulation
- Underfloor insulation
This scheme is open to both low-income households and middle-income households living in energy-inefficient properties.
Home Upgrade Grant (HUG)
For homes that are off the gas grid and rely on expensive heating methods like oil, LPG, or electric heating, the Home Upgrade Grant (HUG) provides financial support for energy-saving improvements.
Eligible homeowners can receive grants to install:
- High-performance insulation
- Energy-efficient heating systems
- Solar panels
This scheme is particularly beneficial for those in rural or off-grid areas looking to cut energy costs and transition to cleaner heating alternatives.
Local Authority Grants
In addition to national schemes, many local councils offer their own energy efficiency grants. These vary depending on your location, but they often include support for insulation, heating upgrades, and renewable energy installations.
To check what’s available in your area, visit your local council’s website or use the UK Government’s energy efficiency support page.
Renewable Energy Incentives
Switching to renewable energy doesn’t just help the environment—it can also save you money in the long run. To encourage more homeowners to invest in green energy, the UK government offers financial incentives for installing renewable energy systems like solar panels and heat pumps.
Whether you want to generate your own electricity or simply cut down on heating costs, these schemes can make renewable energy upgrades much more affordable.
Smart Export Guarantee (SEG)
Thinking about installing solar panels? The Smart Export Guarantee (SEG) allows homeowners to earn money by selling excess electricity back to the grid.
Here’s how it works:
- You install a renewable energy system, such as solar panels or a wind turbine.
- Any excess electricity your home doesn’t use is exported back to the national grid.
- Your energy provider pays you for each unit of electricity exported.
While the rates vary by supplier, this scheme helps homeowners offset the cost of installing renewable technology and can provide ongoing savings.
VAT Reduction on Energy-Saving Materials
In an effort to make energy-efficient home improvements more accessible, the UK government has reduced VAT to 0% on certain energy-saving materials.
This means you’ll pay no VAT on qualifying installations, such as:
- Solar panels
- Heat pumps (air source and ground source)
- Home insulation
- Battery storage systems (when installed with solar panels)
This VAT reduction is in place until at least 2027, making it an excellent time to invest in renewable energy and energy efficiency improvements.
Additional Local Renewable Energy Incentives
Some local councils and energy providers offer extra incentives for homeowners switching to renewables. This can include grants, interest-free loans, or special tariff rates for homes generating their own electricity.
To find out if you qualify for additional support, check with your local council or visit the UK Government’s renewable energy incentives page.
Eligibility Criteria for Energy Grants
Not all energy efficiency grants are available to every homeowner, so it’s important to check the eligibility criteria before applying. Each scheme has its own requirements, but in general, eligibility is based on factors such as income level, property type, and current heating system.
Who Can Apply for Energy Efficiency Grants?
While some schemes are open to all homeowners, many grants are targeted at specific groups, including:
- Low-income households – Many schemes, like ECO4 and the Great British Insulation Scheme, prioritise low-income families or those receiving certain benefits.
- Homeowners with inefficient heating systems – Grants such as the Boiler Upgrade Scheme (BUS) support households replacing old, inefficient boilers with modern, eco-friendly alternatives.
- People living in off-grid homes – The Home Upgrade Grant (HUG) is designed for homes not connected to the gas grid.
- Property owners with poor insulation – Many schemes, including GBIS and ECO4, target homes with inadequate insulation to improve energy efficiency.
Common Eligibility Requirements
While each grant has specific rules, most require applicants to meet at least one of the following conditions:
- You must own the property or have permission from your landlord if you are a tenant.
- Your home must have a low Energy Performance Certificate (EPC) rating (often D or below).
- You must receive certain benefits (e.g., Universal Credit, Pension Credit, or Income Support) for some income-based grants.
- You must be replacing an outdated or inefficient heating system.
How to Check Your Eligibility
If you’re unsure whether you qualify for a specific grant, there are a few easy ways to check:
- Use government eligibility checkers – The UK government provides online tools to check which schemes you may qualify for.
- Contact your local council – Many councils offer additional grants and can help determine your eligibility.
- Speak to an energy provider – Some grants, like ECO4, are managed by energy companies, so they can confirm if you’re eligible.
Meeting the eligibility criteria is the first step to securing financial support for your home improvements. Even if you don’t qualify for one scheme, there may be others available to help reduce the cost of making your home more energy efficient.
How to Apply for Energy Efficiency Grants
Applying for an energy efficiency grant might seem complicated, but with the right guidance, the process can be straightforward. Whether you’re looking to upgrade your heating system, improve insulation, or switch to renewable energy, following these steps will help you access financial support for your home improvements.
Step 1: Identify the Right Grant
Before applying, it’s essential to find the grant that best matches your needs. Consider:
- Are you looking to improve insulation? – Check the Great British Insulation Scheme or ECO4.
- Do you want to replace your boiler with a heat pump? – The Boiler Upgrade Scheme (BUS) may be for you.
- Do you live off the gas grid? – Look into the Home Upgrade Grant (HUG).
- Are you considering solar panels? – The Smart Export Guarantee (SEG) can help you earn from excess energy.
Step 2: Check Your Eligibility
Once you’ve identified the right grant, the next step is to confirm whether you meet the eligibility requirements. You can:
- Use the UK government’s energy efficiency checker to see available schemes.
- Check your Energy Performance Certificate (EPC) rating to determine if your home qualifies.
- Contact your local council to find out if there are additional funding opportunities.
Step 3: Gather the Necessary Documents
Most grant applications require some basic documents, including:
- Proof of homeownership or tenancy agreement (if you’re renting, landlord permission may be required).
- Details of your household income or benefits (for means-tested schemes).
- Your EPC rating or details of your current heating system.
- Quotes from approved installers (some schemes require work to be carried out by accredited professionals).
Step 4: Submit Your Application
Depending on the grant, applications can be submitted through different channels:
- Government Schemes: Apply directly via the official UK government website or through Ofgem.
- Energy Supplier Grants (ECO4): Contact your energy provider to check if they participate in the scheme.
- Local Authority Grants: Visit your council’s website or contact their housing or energy efficiency department.
Step 5: Arrange for Installation
Once your application is approved, you’ll need to schedule the work with an accredited installer. For government-backed schemes, ensure you use an approved contractor who meets the eligibility criteria. This ensures the work is carried out to high standards and in compliance with the grant terms.
Step 6: Claim Your Grant
For some grants, the funding is paid directly to the installer, while for others, you may need to submit an invoice to claim reimbursement. Make sure you keep all relevant paperwork and follow any final steps required by the scheme provider.
By following these steps, you can successfully secure funding to improve your home’s energy efficiency, reduce your carbon footprint, and save money on your energy bills.
Other Ways to Improve Energy Efficiency at Home
Even if you don’t qualify for a government grant, there are still plenty of ways to make your home more energy efficient. Simple upgrades and smart home technology can help reduce energy consumption, lower your bills, and create a more comfortable living space.
Upgrade Your Heating System
One of the biggest sources of energy waste in homes is an outdated heating system. If your boiler is old and inefficient, upgrading to a modern, energy-efficient system can make a huge difference in your energy usage and heating costs.
Not sure which heating system is right for your home? Check out our detailed guide: Choosing the Right Heating System for Your Home.
Improve Home Insulation
Proper insulation is key to keeping heat inside your home, reducing the need for excessive heating during colder months. Adding loft insulation, cavity wall insulation, or even upgrading to eco-friendly insulation materials can have long-term benefits.
For more information on the best insulation options, read: A Guide to Eco-Friendly Insulation Options.
Install a Smart Thermostat
Smart thermostats allow you to control your home’s heating remotely, ensuring you only use energy when you need it. Many models also learn your habits and adjust automatically to improve efficiency.
Want to know how to install one yourself? Check out: How to Install a Smart Thermostat.
Switch to LED Lighting
Replacing traditional incandescent bulbs with LED lighting is a quick and affordable way to cut down on electricity consumption. LEDs use up to 80% less energy and last much longer than standard bulbs.
Seal Gaps and Draught-Proof Your Home
Draughty windows and doors can let cold air in and warm air out, forcing your heating system to work harder. Simple fixes like sealing gaps, adding draught excluders, and using thick curtains can help keep your home warmer without increasing energy usage.
By making these energy-efficient changes—whether big or small—you can enjoy a warmer, more cost-effective, and environmentally friendly home all year round.
Final Thoughts
Improving your home’s energy efficiency isn’t just about cutting costs—it’s an investment in a more sustainable future. With a variety of government grants and incentives available in 2025, there’s never been a better time to upgrade your insulation, switch to renewable energy, or install a more efficient heating system.
Whether you qualify for a grant like the Boiler Upgrade Scheme or the Great British Insulation Scheme, or you decide to make smaller changes like installing a smart thermostat, every improvement helps reduce energy waste and lower your carbon footprint.
If you’re ready to take the next step, start by checking your eligibility for financial support and exploring practical upgrades to make your home warmer, greener, and more cost-efficient.
For more expert home improvement advice, visit the BookaBuilderUK Blog for guides on heating, insulation, and smart home technology.
