Heating upgrade grants for Island residents

UK government grants such as HUG2 and ECO4 provide homeowners with the opportunity to modernise their heating systems at little or no cost.

Introduction: A greener future for UK homes

With the new UK government signalling its intention to pursue existing ambitious carbon reduction targets, a continuing focus is the transition of home heating systems to more energy-efficient and environmentally friendly solutions.

Heating accounts for a significant proportion of domestic energy consumption and carbon emissions, but for many homeowners, the upfront financial burden often rules out an upgrade.

To that end, the previous UK government introduced grants such as HUG2 (Home Upgrade Grant 2) and ECO4 (Energy Company Obligation 4). These programmes provide homeowners with the opportunity to modernise their heating systems at little or no cost.

For households relying on outdated and inefficient storage heaters, the grants can offer a lifeline to upgrade to modern high-heat retention units or even install cutting-edge air-source heat pumps. The newer systems promise not only to reduce energy bills but also to significantly lower a household’s carbon footprint.


What are HUG2 and ECO4 grants?

The HUG2 and ECO4 grants are key components of the UK government’s strategy to tackle fuel poverty and achieve energy efficiency across a significant chunk of the country’s housing stock.

HUG2 (Home Upgrade Grant 2):

HUG2 funds are allocated to local authorities who are responsible for delivering the scheme. HUG2 is targeted at low-income households and properties that are off the mains gas grid. Its focus is to enable these homes to transition to energy-efficient, low-carbon heating systems, such as modern storage heaters and heat pumps. The grant prioritises homes in areas that are under-served by existing energy infrastructure, ensuring equitable access to the benefits of modern heating technology.

You can find out more about HUG2 grants on the government website.

ECO4 (Energy Company Obligation 4):

ECO4, on the other hand, is designed to help vulnerable households improve energy efficiency through funding provided by the big energy suppliers. It includes various measures, from insulation to heating system upgrades. Unlike HUG2, ECO4 applies more broadly to properties connected to the gas grid as well as off-grid properties. Both programs aim to alleviate fuel poverty and support the UK’s net-zero goals.

To qualify for these grants, applicants must meet specific criteria, such as being on certain types of government benefits or having a household income below a set threshold. The grants also prioritise homes with lower energy performance ratings (EPC Band D or below).

You can find out more about ECO4 on the Ofgem website.


The importance of heating system upgrades

Outdated heating systems, such as older storage heaters, are notorious for their inefficiency and high operating costs. They often lead to excessive energy bills and do little to reduce a home’s carbon emissions. As energy prices rise and climate change becomes an increasingly urgent concern, upgrading to modern heating systems is no longer just a luxury —it’s a necessity.

Modern heating technologies like high-heat retention storage heaters and air-source heat pumps (ASHPs) offer a dual benefit: they help reduce energy consumption while enhancing comfort and convenience. These technologies align with the government’s push for greener energy solutions, which are critical to achieving the UK’s net-zero carbon emissions target by 2050.

Upgrading old storage heaters to high-heat retention units

What are high-heat retention storage heaters?

High-heat retention storage heaters represent a significant advancement over traditional, old-fashioned storage heaters. These modern units are designed to store heat during off-peak electricity hours and release it gradually throughout the day, ensuring a consistent and comfortable indoor temperature. Unlike older models, they feature advanced insulation materials and smart controls, allowing homeowners to better manage their energy use.

Benefits of high-heat retention storage heaters:

  1. Improved efficiency: Modern storage heaters are up to 30% more efficient than their older counterparts. This translates to substantial savings on energy bills over time.
  2. Smart controls: Many models come equipped with programmable timers and thermostats, giving homeowners greater control over their heating schedules and energy use.
  3. Lower carbon footprint: By using off-peak electricity, high-heat retention heaters minimise demand during peak hours, contributing to a more balanced and sustainable energy grid.
  4. User-friendly design: These units are quieter, sleeker, and easier to operate than old-fashioned storage heaters.

Eligibility for storage heater upgrades:

Under HUG2 and ECO4, homeowners with inefficient storage heaters are eligible for free or subsidised upgrades if they meet the grant criteria. The grants prioritise households in low-income brackets or those on benefits, houses in rural and off-grid areas, and properties where the efficiency gains from modern heaters can make the most impact (typically homes with an EPC rating of D or lower). By replacing old units, households can enjoy better comfort, lower bills, and a reduced environmental impact.

Air-source heat pumps: A sustainable alternative

What are air-source heat pumps?

Air-source heat pumps (ASHPs) are an innovative heating solution that extracts heat from the outside air and uses it to warm a home. They work even in cold climates and are highly energy-efficient, using electricity to transfer heat rather than generate it. As a renewable heating technology, ASHPs are ideal for reducing both carbon emissions and energy bills.

Benefits of air-source heat pumps:

  • Environmental sustainability: ASHPs produce significantly fewer greenhouse gas emissions than traditional heating systems. They’re a key tool in achieving net-zero targets.
  • Energy efficiency: These systems can deliver three to four units of heat for every unit of electricity consumed, making them much more efficient than conventional electric heaters.
  • Lower operating costs: While installation can be expensive, the long-term savings on energy bills make ASHPs a cost-effective solution. When installed under HUG2 or ECO4, homeowners can often avoid these upfront costs entirely.
High-heat retention storage heatersAir-source heat pumps (ASHP)
Energy sourceElectricity (off-peak)Renewable (air) + electricity
EfficiencyHigh (up to 30% savings vs old units)Very High (300-400% efficiency)
Carbon emissionsReduced (if paired with green tariffs)Very Low
Installation costLow to moderateHigh (but can be covered by grants)
Ease of installationSimple (direct replacement)Complex (requires outdoor unit, radiators and hot water cylinder)

While high-heat retention storage heaters are an excellent upgrade in situations requiring minimal changes, ASHPs are ideal for properties undergoing more extensive retrofitting.


Challenges and considerations

Despite the benefits, there are some challenges to consider when upgrading heating systems under HUG2 and ECO4:

  1. Funding limitations: The grants have funding caps and strict eligibility requirements. Availability may also vary depending on location and demand.
  2. Property suitability: Not all properties are suitable for every type of heating system. For example, ASHPs require outdoor space for the unit and may not be ideal for flats.
  3. Ongoing costs: While the installation is covered, homeowners may need to budget for maintenance costs, particularly for air-source heat pumps.
  4. Decision making: Choosing the right heating upgrade depends on factors such as home insulation, upfront installation complexity, and long-term goals for energy efficiency. A thorough retrofit assessment will be required before any grant-funded work can take place.

The future of heating upgrades in the UK

Heating system upgrades supported by HUG2 and ECO4 are a critical part of the UK’s journey toward net-zero carbon emissions. As renewable energy technology advances, we can expect to see further innovations in heating systems and additional funding opportunities. Smart grids, hybrid heating solutions, and integration with renewable energy sources like solar panels may become more widespread.

By investing in these upgrades now, homeowners can future-proof their properties, reduce energy bills, and contribute to a greener, more sustainable future.


Conclusion: Take advantage of the opportunity

The HUG2 and ECO4 grants offer an incredible opportunity for UK homeowners to modernise their heating systems, reduce their energy bills, and lower their carbon footprint. Whether upgrading to high-heat retention storage heaters or installing an air-source heat pump, these improvements deliver both immediate and long-term benefits.

With the increasing urgency to combat climate change and the rising costs of energy, there has never been a better time to take advantage of these grants. By making the switch, homeowners can ensure their homes are not only warmer and more efficient but also part of the solution to a global challenge.