The UK government is reportedly considering reducing subsidies for heat pump installations as part of efforts to reallocate funds toward increased defence spending. Energy Secretary Miatta Fahnbulleh has been tasked with identifying over £1 billion in savings within the Department for Energy Security and Net Zero’s budget to support expanded military investment.
A significant portion of the potential cuts could come from the £2.7 billion boiler upgrade scheme, which currently provides grants of up to £9,000 to households replacing gas boilers with low-carbon heating systems such as electric heat pumps. While sources indicate that the scheme itself will not be completely scrapped, officials are reportedly reviewing how much funding can be trimmed as defence spending priorities intensify.
The boiler upgrade initiative aligns with the government’s broader commitment to accelerate the transition away from fossil fuels and reduce reliance on natural gas. However, Treasury officials have raised concerns about the cost-effectiveness of heat pump grants, with some viewing the scheme as disproportionately benefiting middle-class households rather than delivering broad social value.
To date, the grants have supported tens of thousands of homes in switching from gas boilers to cleaner heating alternatives, contributing to national climate goals. Industry representatives caution that cutting financial support at this stage could undermine the nascent heat pump market and make it more difficult for families to adopt low-carbon heating solutions.
As the government balances competing priorities between defence and energy policy, the final decisions on subsidy adjustments are expected to have implications both for the UK’s climate ambitions and for the evolving clean energy sector.