Air Source Heat Pumps on ECO4 and the Warm Homes Plan: The Complete UK Guide for 2026
With UK households continuing to face high energy costs and stricter carbon reduction targets, heating systems are under the spotlight. One of the most effective low-carbon alternatives to traditional gas boilers is the air source heat pump (ASHP), and thanks to schemes like ECO4 and the Warm Homes Plan, many homeowners can now get one installed at little or no upfront cost.
If you’re researching air source heat pumps on ECO4 or wondering whether you qualify under the Warm Homes Plan UK, this in-depth guide explains everything you need to know, including eligibility criteria, funding levels, savings potential, installation process, and how to apply.
What Is an Air Source Heat Pump?
An air source heat pump is a renewable heating system that extracts heat from the outside air and uses it to warm your home and hot water. Even in cold weather, outside air contains usable heat energy. The system compresses this heat to a higher temperature and transfers it into your home’s heating system.
Unlike gas or oil boilers that burn fuel, heat pumps move heat rather than generate it through combustion. This makes them significantly more energy efficient. In fact, for every unit of electricity used, an air source heat pump can produce two to four units of heat.
Because they dramatically reduce carbon emissions and improve energy efficiency, air source heat pumps are heavily supported under UK government schemes like ECO4 and the Warm Homes Plan.
What Is ECO4?
ECO4 (Energy Company Obligation Phase 4) is a government energy efficiency scheme running until 2026. It requires large energy suppliers to fund home energy improvements for eligible households, particularly those experiencing fuel poverty or living in energy-inefficient properties.
ECO4 focuses on long-term solutions rather than short-term fixes. Instead of simply replacing boilers, the scheme prioritises whole-house upgrades that significantly improve a property’s Energy Performance Certificate (EPC) rating.
Air source heat pumps are a key technology supported under ECO4 because they:
- Replace inefficient fossil fuel heating systems
- Lower long-term energy bills
- Reduce household carbon emissions
- Improve EPC ratings
- Support the UK’s net zero targets
In many qualifying cases, ECO4 funding can cover the full cost of air source heat pump installation.
What Is the Warm Homes Plan?
The Warm Homes Plan is another government-backed initiative designed to improve energy efficiency in low-income and vulnerable households. Delivered via local authorities and approved installers, the scheme supports a range of measures including insulation, solar panels, and low-carbon heating systems like air source heat pumps.
While ECO4 is funded through energy suppliers, the Warm Homes Plan often operates through council-led programmes. Both schemes aim to reduce fuel poverty and future-proof homes against rising energy prices.
For eligible households, the Warm Homes Plan may fully fund the installation of an air source heat pump, particularly where homes are off the gas grid or have poor EPC ratings.
Who Qualifies for Air Source Heat Pumps on ECO4?
Eligibility for ECO4 is primarily income and benefit-based, though property suitability also plays an important role.
Households may qualify if they receive benefits such as Universal Credit, Pension Credit, Income Support, Child Tax Credit, Housing Benefit, or income-based Jobseeker’s Allowance. The scheme is specifically targeted at supporting lower-income households struggling with high energy bills.
In addition to benefit recipients, some households may qualify under LA Flex (Local Authority Flexible Eligibility). This allows councils to approve households that do not receive benefits but are considered low-income or vulnerable to fuel poverty.
Property requirements are also important. ECO4 prioritises homes with EPC ratings of D, E, F, or G. The goal is to improve properties to at least a C rating where possible.
Homes with electric heating, oil boilers, LPG systems, or old inefficient gas boilers are strong candidates for air source heat pump upgrades.
Who Qualifies Under the Warm Homes Plan?
Eligibility under the Warm Homes Plan varies depending on your local authority, but the focus remains similar: improving inefficient homes occupied by low-income or vulnerable households.
You may qualify if your household income falls below a specified threshold, even if you are not claiming benefits. Properties with low EPC ratings are often prioritised, especially if heating costs are disproportionately high.
Off-gas homes are frequently considered strong candidates because heat pumps provide a cleaner and often more affordable alternative to oil or electric heating systems.
Vulnerable residents, including elderly occupants, families with young children, or individuals with medical conditions worsened by cold homes, may receive priority consideration.
Because funding is regionally distributed, checking with your local council is essential.
How Much Does an Air Source Heat Pump Cost?
On the private market, air source heat pump installation typically costs between £8,000 and £14,000, depending on property size, radiator upgrades, and system design.
Under ECO4 or the Warm Homes Plan, eligible households may receive:
- Full funding covering supply and installation
- Partial grants reducing upfront costs
- Combined packages including insulation upgrades
In many fully eligible cases, there is no upfront payment required.
Funding often includes necessary system adjustments such as radiator replacements, pipework upgrades, and cylinder installation to ensure optimal performance.
How Much Can You Save With an Air Source Heat Pump?
Savings vary depending on your current heating system, property insulation, and energy usage.
Households replacing old electric storage heaters or oil boilers often see the largest savings. In some cases, annual heating costs can reduce by several hundred pounds.
Because heat pumps are highly efficient, they provide more heat output per unit of electricity compared to traditional electric heating. When combined with good insulation and smart heating controls, long-term savings become even more significant.
Additionally, switching from fossil fuels reduces exposure to gas and oil price volatility, offering greater long-term cost stability.
The Installation Process Explained
The process begins with an eligibility assessment to confirm qualification under ECO4 or the Warm Homes Plan. Once approved, a detailed home energy survey is conducted.
During the survey, assessors evaluate insulation levels, radiator sizes, pipework, hot water systems, and overall property suitability. Heat pumps operate at lower flow temperatures than gas boilers, so adequate insulation and appropriately sized radiators are essential.
If improvements such as loft insulation or cavity wall insulation are required, these are often installed before or alongside the heat pump.
Installation typically takes two to five days. The external unit is mounted outside the property, while an indoor cylinder and control system are installed inside. After system testing and commissioning, homeowners receive guidance on how to operate the controls efficiently.
Benefits Beyond Energy Savings
Air source heat pumps offer more than just reduced heating bills. They significantly lower household carbon emissions, helping the UK meet its climate goals.
They also improve EPC ratings, which may increase property value and ensure compliance with future housing standards.
Heat pumps provide consistent, steady warmth rather than the on-off heat cycle typical of gas boilers. Many homeowners find this results in improved comfort levels throughout the home.
Additionally, because there is no combustion, there is no risk of carbon monoxide leaks.
Can Air Source Heat Pumps Work in the UK Climate?
Yes. Modern air source heat pumps are designed to operate efficiently even in temperatures as low as -15°C. Scandinavian countries with colder climates widely use heat pump technology, demonstrating its reliability in northern European conditions.
While performance is strongest in well-insulated homes, improvements funded under ECO4 or the Warm Homes Plan often ensure properties are suitably prepared before installation.
Why Apply Now?
ECO4 runs until 2026, but funding is allocated through energy suppliers and approved contractors in phases. High demand means availability can vary by region.
Similarly, Warm Homes Plan funding is distributed locally and may be limited by council budgets.
As energy efficiency regulations tighten and net zero targets approach, applying sooner increases the likelihood of securing full funding.
Common Questions About Air Source Heat Pumps on ECO4
Many homeowners wonder whether heat pumps are disruptive to install. While installation requires internal and external work, professional teams typically complete projects within a few days.
Others ask whether radiators must be replaced. In some cases, larger radiators are required to maximise efficiency, and this is often included in funded installations.
There are also concerns about noise. Modern units operate quietly, comparable to a standard refrigerator, and must meet UK planning noise regulations.
Final Thoughts
For eligible households, installing an air source heat pump under ECO4 or the Warm Homes Plan represents one of the most valuable home upgrades available in 2026.
With potentially no upfront cost, reduced heating bills, improved EPC ratings, lower carbon emissions, and protection against rising fossil fuel prices, the long-term benefits are substantial.
As the UK transitions toward low-carbon heating solutions, government-backed schemes are making renewable technology more accessible than ever. If you qualify, applying for an air source heat pump through ECO4 or the Warm Homes Plan could future-proof your home for decades to come.