Grants & Subsidies

The UK government is committed to delivering a low-carbon future and recognise the role ground source heat pumps can play, whilst also providing low-cost heat and reducing air pollution. To this end a range of subsidies are available to support ground source heat pumps.

Enfield Ground Source Heat Pump Tower Blocks Upgrade Combats London Air Pollution

Expert Advisers

Kensa are experts in UK government subsidies for ground source heat pumps. We work hard to keep this knowledge up-to-date, and are key influencers in shaping new policy. As such, we are uniquely placed to advise and assist you on the best options available for your projects.

Kensa Contracting provide dedicated claims to support and direct relationships with utilities to secure the subsidy required. Details of current subsidies Kensa Contracting are able to support are detailed below.

The Energy Company Obligation (ECO)

The ECO provides an upfront grant to those delivering retrofit housing schemes, and is based upon the amount of carbon that will be saved by replacing the current heating system with a Shared Ground Loop Array ground source heat pump system.

The government’s response to ECO4 consultation sets out the policy of the scheme from April 2022 until March 2026. Please click here to find out more about ECO4.

Discover ECO

Green Heat Network Fund (GHNF)

This scheme intends to help new and existing heat networks to move to low and zero-carbon technologies. The fund is anticipated to run from April 2022 to November 2024.

Aimed at developers and investors in low-carbon heat networks, such as Shared Ground Loop Arrays, the objectives are to achieve carbon savings, increase the amount of low-carbon heat utilisation in heat networks and help prepare the market for low-carbon regulation.

Discover the GHNF

Social Housing Decarbonisation Fund (SHDF)

The government committed to the Social Housing Decarbonisation Fund (SHDF) in 2019, with a proposed £3.8bn available over a 10-year period. The SHDF will upgrade a significant amount of social housing stock to an Energy Performance Certificate rating of C through insulation measures or retrofitting inefficient heating, improving energy performance and lowering bills.

In December 2023, it was announced that the SHDF has been allocated £1.25bn to support up to 140,000 social homes. Social landlords can plan and invest in further retrofit works to help lift residents out of fuel poverty, ensuring they live in warm homes that are affordable to heat.


Discover the SHDF

The fund will help:

  • deliver warm, energy-efficient homes
  • reduce carbon emissions and fuel bills
  • tackle fuel poverty
  • support green jobs

Read Kensa’s blog: How can social landlords benefit from the SHDF with Kensa

Wave 3 of SHDF is due to open for applications in Summer 2024 (dates subject to change). It is crucial to get bid-ready so you can apply when the window opens. Contact Kensa for help.

Public Sector Decarbonisation Scheme (PSDS)

Eligible projects

The PSDS is a £1billion fund dedicated to heat decarbonisation and capital energy efficiency projects in non-domestic public sector buildings across England. Covering up to 88% of ground source heat pump installation costs, the scheme’s objective is to achieve significant carbon savings within the sector.

Eligible public sector bodies include:

  • Emergency services
  • NHS Trusts & Foundation Trusts
  • Further & higher education institutions
  • Local authorities
  • Maintained schools within the state education system
  • Nursery schools maintained by a local authority
  • Central government departments & non-departmental government bodies
  • MOD estate
Discover the PSDS

Guidance on Phase 4 will be released in summer 2024.

The annual funding allocation for Phase 4 of the Public Sector Decarbonisation Scheme:

£670 million available in 2025/2026 – up to £335 million of this funding is allocated to the second year of PSDS Phase 3c.

£300 million available in 2026/2027

£200 million available in 2027/2028

Be ‘shovel ready’ for 2025/2026 funding

With each funding round oversubscribed and short timescales to submit bids, projects need to be ‘shovel-ready’ to have a chance of success.

Kensa has already assisted several local authorities and institutions to secure PSDS funding.

Contact us to discuss any potential schemes, and we can support any application bids.

Read Kensa’s blog: How can public sector buildings benefit from the PSDS with Kensa

Contact us

Funding in Scotland

In October 2021, the Scottish Government published a heat in buildings strategy, outlining a commitment to invest £1.8 billion in capital funding over the next five years for energy efficiency and zero carbon heating in Scotland’s buildings.

This includes:

The Scottish Green Public Sector Estate Decarbonisation Scheme. comprising of 3 components:

  • Scottish Public Sector Energy Efficiency Loan Scheme
    • This loan scheme offers zero-interest loans to the public sector to enable them to undertake spend to save retrofit energy efficiency improvement projects to help them achieve net zero carbon in their estates.
  • Scottish Central Government Energy Efficiency Grant Fund
  • Scottish Public Sector Non-Domestic Energy Efficiency Frameworks (NDEEF) and Project Support Unit (PSU)