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.

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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 September 2024. The Transition Scheme is live, offering funding to help commercialise projects ready to apply for construction funding in 2022.

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 SHDF will upgrade a significant amount of social housing stock to an Energy Performance Certificate rating of C, with the fund expected to offer a potential £3.8bn overall.

Wave 1, which ran in the financial year 2021/22, awarded £179m of funding to 69 projects which will improve the energy performance of around 20,000 social homes.

Wave 2 opened on 29th September 2022, with application submission details to be published in October. The competition closed on 18th November and bid assessments for Wave 2 ended in December 2022.

Successful projects will be notified in late February, early March and grant funding agreements signed with successful lead applicants from March 2023.

The applications will be worth £800m across three years. 

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

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

Be ‘shovel ready’ for potential funding

Phase 3b of the Public Sector Decarbonisation Scheme is set to provide £635 million of grant
funding over the financial years 2023/2024 to 2024/2025 – this is to be split with up to £402 million
for 2023/24 and up to £233 million for 2024/25.

It is clear there is both a need in the market and a desire from the government to support the development of schemes in this sector. However, with each funding round oversubscribed and short timescales to submit bids, projects need to be ‘shovel-ready’ to have a chance of success.

The application window for PSDS Phase 3b closed on 31 October 2022.

Stay in touch with Kensa to find out about further rounds of funding. Kensa has already assisted a number of 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

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