Energy Efficiency Grants and Support in the UK

Energy Company Obligation (ECO4) is a government-mandated scheme that requires larger energy suppliers to fund energy efficiency improvements in the homes of low-income and vulnerable households. ECO4 runs until March 2026 and focuses on improving the least energy-efficient homes (EPC bands D to G) occupied by people receiving means-tested benefits.

Eligible measures include wall insulation, loft insulation, underfloor insulation, heating system upgrades (including first-time central heating), and low-carbon heating such as air source heat pumps. The measures are fully funded — you do not pay anything if you are eligible. To check eligibility and apply, contact your energy supplier or use the government's Simple Energy Advice service.

The Great British Insulation Scheme (GBIS) has a wider remit, targeting homes in EPC bands D to G that are not necessarily occupied by benefit recipients. The scheme focuses primarily on insulation (cavity wall, solid wall, loft, and underfloor). Funding is partial rather than full — households above the income threshold may contribute to costs. The scheme is also delivered through energy suppliers.

The Boiler Upgrade Scheme (BUS) provides capital grants to help households in England and Wales replace fossil-fuel heating systems with low-carbon alternatives. Current grant values are:

• Air source heat pump — £7,500 (increased from £5,000 in October 2023)
• Ground source heat pump — £7,500
• Biomass boiler — £5,000 (only in areas not connected to the gas grid)

The grant is applied by a Microgeneration Certification Scheme (MCS)-certified installer and deducted from the customer's bill — you do not need to claim it separately. To be eligible, your home must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation. If your home has existing insulation recommendations, you will need to address these before the BUS grant can be used.

The scheme is intended to run to 2028 but funding limits apply each year. Demand has varied, and in some periods, all available vouchers have been allocated. Check the current position on GOV.UK before proceeding.

The Warm Home Discount is a £150 rebate applied directly to the electricity bills of eligible households. Most eligible customers are automatically identified and do not need to apply — the discount is applied by energy suppliers following a government data-matching exercise. Eligibility is based on receiving the Guarantee Credit element of Pension Credit, or being on a low income with high energy costs as assessed by the government.

Households in Scotland may have slightly different eligibility criteria and application processes — check with your energy supplier or the Scottish Government's advice services.

The Cold Weather Payment is £25 for each week of very cold weather (average temperature at or below 0°C for seven consecutive days) for people on certain qualifying benefits including Pension Credit, Income Support, income-based JSA or ESA, or Universal Credit with a health condition or disability premium. These payments are automatic and do not require an application.

UK businesses can access several forms of support to improve energy efficiency:

• Enhanced Capital Allowances — Businesses can claim 100% first-year capital allowances on qualifying energy-efficient plant and machinery, reducing their tax bill in the year of purchase.
• Green Economy Finance (British Business Bank) — Facilitates lending to businesses investing in energy efficiency measures, electric vehicles, and clean technology.
• Industrial Energy Transformation Fund (IETF) — Phase 3 provides grants to energy-intensive industries to fund feasibility studies and capital projects reducing energy use and carbon emissions.
• Energy Savings Opportunity Scheme (ESOS) — Mandatory energy audits every four years for large UK businesses (250+ employees or £44 million+ turnover/balance sheet). Completing ESOS identifies opportunities but does not fund improvements directly.

Some local councils also offer business energy efficiency grants using UKSPF or other local funding. Contact your local Growth Hub or council economic development team for details of what is available in your area.