Solar vs. Heat Pumps: Which Warm Homes Plan Incentive Saves You More?

The Warm Homes Plan is investing billions of pounds to help make British homes cheaper to run.

Solar panels and heat pumps are key parts of this plan. Both can help you use less fossil fuel, lower your energy bills, and qualify for government support.

However, the way this support works differs for both.

From August 2026, homeowners who qualify can get a large Boiler Upgrade Scheme grant for a heat pump. Support for solar panels is mainly being developed through low- and zero-interest loans.

Some lower-income households might also get solar panels or heat pumps fully funded through the Warm Homes: Local Grant.

So if you are trying to decide which government support could help your home the most, which option is better?

An Engineer’s View

When deciding between solar and a heat pump, always evaluate your property’s heat loss first. A heat pump requires a well-insulated home to operate efficiently, whereas solar panels will generate electricity regardless of your home’s thermal performance.

– Matthew Powell, Engineer

What Is the Warm Homes Plan?

The Warm Homes Plan is a government programme designed to improve the energy efficiency of UK homes.

It involves £15 billion of public investment and aims to upgrade up to five million homes by 2030. The plan covers technologies such as:

• heat pumps
• solar photovoltaic (PV) panels
• battery storage
• insulation
• smart energy controls

Rather than a single grant, the Warm Homes Plan combines several types of funding and support.

If you are thinking about solar panels, you will not automatically get the same financial support as someone replacing a fossil-fuel heating system with a heat pump.

What Heat Pump Funding Is Available in 2026?

This is where heat pumps currently have a clear advantage.

Through the Boiler Upgrade Scheme (BUS), eligible households can receive:

• £7,500 towards an air-to-water air source heat pump
• £7,500 towards a ground source heat pump
• £2,500 towards an air-to-air heat pump

There is also extra temporary support for some homes that are not connected to the gas grid.

Until March 2027, qualifying properties heated by oil or LPG without a mains gas connection can receive an additional £1,500 towards an eligible air-source or ground-source heat pump, potentially increasing the grant to £9,000.

For homeowners dealing with the high upfront cost of replacing a heating system, this is a big help.

This is a grant, not a loan, so the amount is taken off the cost instead of being borrowed and paid back.

What Solar Panel Support Is Available?

Support for solar panels under the Warm Homes Plan works differently.

The government has announced plans for low- and zero-interest consumer loans to make solar panels, batteries, heat pumps and other home improvements more affordable.

The Warm Homes Plan says that up to £1.7 billion from the Warm Homes Fund is intended for new low- and zero-interest consumer loans, with additional government funding to reduce borrowing costs. The proposed loans could fund individual technologies or packages including solar PV, batteries and heat pumps.

However, this is not the same as a universal £7,500 grant for solar panels.

As of August 2026, the broader Warm Homes consumer finance programme is moving towards launch. The government has developed the Warm Homes Loan Scheme, designed to unlock consumer finance for home energy upgrades, and is inviting lenders to participate.

This means there is a big difference right now:

Heat pumps are eligible for a nationwide upfront grant for eligible homes. Solar panels do not have a similar grant at the moment.

Can You Get Solar Panels For Free Under the Warm Homes Plan?

It is possible, but only if you meet the requirements for certain schemes.

The Warm Homes: Local Grant is available in England for qualifying lower-income households living in privately owned homes.

To qualify, a property generally needs to:

• be in England
• be privately owned
• have an EPC rating of D, E, F or G

Usually, your household income needs to be £36,000 a year or less, but some households with higher incomes may still qualify based on their postcode or benefits.

If you qualify and your local authority has funding available, it will arrange a home survey to assess which improvements are suitable for your property.

These can include:

• insulation
• solar panels
• air source heat pumps
• smart heating controls

If you own your home, the local authority can arrange and pay for the agreed improvements, so you do not have to pay anything. There are different rules for privately rented homes.

In this case, either solar panels or a heat pump could be fully funded.

However, you cannot just pick the most expensive option. The improvements are chosen based on your property and what is considered suitable.

Solar Vs Heat Pumps: Which Incentive Is Worth More?

For most homeowners who do not qualify for fully funded upgrades, the heat pump incentive currently offers more immediate financial value.

The key point here is the word immediate.

A £7,500 grant provides a direct reduction in the installation cost of a qualifying heat pump.

A low-interest solar loan can make installation more affordable, but you are still paying for the system over time instead of getting the same amount as a grant.

Does Solar Save More On Energy Bills?

This is where the comparison shifts.

Solar PV tackles your electricity bill.

Instead of buying all your electricity from your supplier, your panels make electricity during the day. The more of this you use, the less you need to buy from the grid.

The government estimates that rooftop solar panels can save a typical household about £500 a year on energy bills, though actual savings depend on your system, home, electricity use, and tariff.

Jargon Buster: Smart Export Guarantee
A government-backed initiative that requires large electricity suppliers to pay homeowners for any surplus renewable electricity they generate and export back to the National Grid.

Any eligible surplus electricity can also be exported through the Smart Export Guarantee, providing another potential source of value.

A battery lets you use some of your solar power in the evening, so you can use more of the electricity you generate.

However, adding a battery also means a higher upfront cost.

Does A Heat Pump Save More On Heating Bills?

Saving money with a heat pump is a bit more complicated.

Solar panels generate electricity without fundamentally changing your existing heating system.

A heat pump replaces or significantly changes your heating system.

Its running cost therefore depends on factors including:

• the system’s efficiency
• the property’s heat loss
• radiator or underfloor heating design
• flow temperatures
• electricity prices
• the heating system being replaced
• the household’s heating demand
• the electricity tariff

A well-designed heat pump can produce several units of useful heat from each unit of electricity it consumes.

But not every household will see the same percentage cut in their heating bill right away.

A home switching from expensive oil, LPG, or direct electric heating could save much more than a modern gas-heated home.

This is why good installation and system design are just as important as the efficiency rating.

Which Saves More: Solar Or A Heat Pump?

There is no single winner for everyone.

If by “saving” you mean receiving the largest immediate government contribution toward installation, the heat pump currently comes out ahead for most eligible homeowners.

The Boiler Upgrade Scheme can remove £7,500 from the cost of a qualifying installation, or potentially £9,000 for certain off-gas-grid homes until March 2027.

If your goal is to lower your annual electricity bill without making many changes to your heating system, solar panels might be the simpler choice.

And if you qualify for the Warm Homes: Local Grant, the calculation changes again because solar panels, insulation, or a heat pump could be fully funded, depending on your property’s assessment.

To sum up:

• Heat pump: potentially much larger upfront subsidy.
• Solar: potentially simpler ongoing electricity savings.
• Solar plus a heat pump: possibly the best long-term combination.

What About Installing Solar And A Heat Pump Together?

This is where the Warm Homes Plan gets especially interesting.

A heat pump runs on electricity, while solar panels generate it.

Put the two technologies together, and part of the electricity required to heat your property could come from your own roof.

Adding battery storage and a suitable time-of-use electricity tariff can take the concept further.

Government modelling for the Warm Homes Plan estimates that a typical household adopting a package containing a heat pump, solar PV and battery could save up to £550 a year, although the figure depends on numerous assumptions and should not be treated as a guaranteed household saving.

The government also intends for its consumer finance programme to support packages of technologies, rather than forcing homeowners to finance each improvement separately.

The future may therefore be less about choosing Team Solar or Team Heat Pump and more about making several technologies work together.

Should You Get Solar Or A Heat Pump First?

Think about what you are trying to solve.

Consider a heat pump first when:

• your existing boiler is approaching replacement
• you currently heat with oil or LPG
• your property is suitable for low-temperature heating
• you qualify for the Boiler Upgrade Scheme
• reducing fossil-fuel heating is your priority

Consider solar first when:

• your existing heating system still has plenty of life left
• you have a suitable roof
• you use substantial amounts of electricity during daylight hours
• reducing grid electricity consumption is the immediate priority
• you are considering an EV, battery or heat pump later

There is also nothing wrong with approaching home electrification in stages.

Solar installed today can later supply electricity to a heat pump or an EV. A heat pump installed today can subsequently benefit from solar and battery storage.

The house does not care which box arrived first.

Check The Available Grants Before Comparing The Technologies

The biggest mistake is to compare solar panels and heat pumps only by their installation costs.

First, check which support you are actually eligible for.

For many households, a £7,500 Boiler Upgrade Scheme grant can make installing a heat pump much more affordable.

For eligible low-income households, the Warm Homes: Local Grant can make an even bigger difference, since upgrades such as insulation, solar panels, and a heat pump may be provided at no cost.

As the new Warm Homes loan programme expands, it could also make it much easier for more households to afford solar panels.

Is a Heat Pump Right for Your Home?

Government support is helpful, but a grant should not be the only reason you choose a heating system.

The best system is the one that fits your property.

WarmZilla can help even if you do not qualify for a heat pump grant or if a heat pump is not right for your home.

For many homes, swapping an old boiler for a modern combi gas boiler can be a simpler way to get reliable heating, especially if your home is already connected to the gas grid.

Complete WarmZilla’s online boiler survey to compare suitable combi boiler options and get a fixed-price installation quote.

The Warm Homes Plan could help some households lower the cost of upgrading their heating.

If you do not qualify for that support, your next step is to figure out which replacement heating option makes the most sense for your home and budget.

Frequently Asked Questions

Can I Get £7,500 Towards Solar Panels Under The Warm Homes Plan?

No. The £7,500 figure applies to qualifying air-to-water and ground source heat pumps through the Boiler Upgrade Scheme.

The Warm Homes Plan proposes low- and zero-interest consumer finance for solar PV, while some eligible lower-income households may receive solar through schemes such as the Warm Homes: Local Grant.

Can I Combine Solar Panels With A Heat Pump?

Yes. Solar PV can generate electricity that can contribute towards the electricity used by a heat pump.

Government modelling specifically considers packages combining heat pumps, solar panels and battery storage.

Is The £9,000 Heat Pump Grant Available To Everyone?

No. The normal grant for qualifying air-to-water and ground source heat pumps is £7,500.

Until March 2027, an additional £1,500 is available where a qualifying property does not have a mains gas connection and is currently heated using oil or LPG.