The UK sold a record 125,037 heat pumps in 2025, according to the Heat Pump Association, a 27% increase on the previous year. But the government's Warm Homes Plan calls for 450,000 installations per year by 2030, and growth is decelerating rather than accelerating. This article covers the sales data, the expanded Boiler Upgrade Scheme, the Clean Heat Market Mechanism, what the Home Energy Model changes for heat pump assessment, and new evidence on energy savings in homes that have already made the switch.
The Gap to 450,000: Record Sales, Slowing Momentum
· Source: HPA UK
The Heat Pump Association's annual figures confirm 125,037 heat pumps sold across the UK in 2025, of which 110,353 were hydronic (air-to-water or ground source) systems. Year-on-year growth came in at 27%, a healthy number in isolation, but a marked slowdown from the 56% growth recorded in 2024.
The government's Warm Homes Plan targets 450,000 heat pump installations per year by 2030. Reaching that figure from the 2025 baseline would require approximately 33% compound annual growth every year for the next five years. With growth already decelerating, the trajectory is moving in the wrong direction. HPA Chief Executive Charlotte Lee warned that “more must be done to meet government targets”, calling for stronger policy signals and greater consumer confidence.
What this means: Heat pumps are central to the Future Homes Standard strategy, and HEM's improved modelling makes accurate heat pump performance data more important than ever. If sales growth continues to slow, the supply chain, installer base, and policy framework will all need to scale faster to close the gap.
| Year | Target Pace (33% growth) | Actual / Projected |
|---|---|---|
| 2024 | ~98,000 | 98,450 (actual) |
| 2025 | ~131,000 | 125,037 (actual, 5% below target) |
| 2026 | ~174,000 | Projected |
| 2027 | ~231,000 | Projected |
| 2028 | ~307,000 | Projected |
| 2029 | ~408,000 | Projected |
| 2030 | 450,000 | Government target |
UK Manufacturing Surge: Domestic Production Up 38%
· Source: HPA UK
A growing share of the UK market is being served by domestic manufacturers. 36% of 2025 sales were UK-manufactured, with production volumes up 38% year-on-year. Air-to-water monobloc systems saw a 26% increase, ground and water source heat pumps grew 32%, and domestic hot water heat pumps rose by 36%.
The growth in domestic manufacturing is particularly significant for long-term market stability, reducing reliance on European imports and building the industrial base needed for a sustained rollout through the rest of the decade.
What this means: Supply chain localisation reduces import bottlenecks and shortens lead times, critical for Future Homes Standard delivery at scale.
BUS Expands: Air-to-Air Heat Pumps and Heat Batteries
· Sources: HIES Scheme / Alto Energy
The Boiler Upgrade Scheme has broadened its technology coverage. Air-to-air heat pumps become eligible from April 2026 for a £2,500 grant, a new addition alongside the existing £7,500 for air source and ground source systems. Exhaust air heat pumps have also been brought into scope for low-energy buildings, and heat batteries now qualify for a £2,500 grant under the BUS.
The scheme has supported over 70,000 installations to date, with more than £485 million paid out. The budget for 2025/26 has been authorised at £395 million (an over-allocation reflecting growing demand), and the scheme has been extended to 2030. An EPC requirement relaxation is expected from 2026/27 to reduce barriers for harder-to-treat properties.
What this means: Wider technology coverage and relaxed EPC rules remove barriers for harder-to-treat properties. This is particularly relevant for flats and smaller homes where air-to-air is often more practical than air-to-water.
Clean Heat Market Mechanism: Year 2 Sets 8% Target
· Source: GOV.UK (government response)
From 1 April 2026, CHMM Year 2 requires that 8% of relevant boiler sales must be heat pumps, up from the introductory target in Year 1. Manufacturers who fall short must purchase credits from those who exceed the target, creating a financial incentive to shift production and marketing toward heat pumps.
Alongside the CHMM revision, the Microgeneration Certification Scheme (MCS) becomes the sole certification scheme for all government-funded clean heat measures from 2026/27. This affects the BUS, ECO4, Warm Homes: Social Housing Fund (WH:SHF), and Warm Homes: Local Grant (WH:LG) programmes.
What this means: The CHMM creates a regulatory floor for heat pump deployment: manufacturers must sell them or buy credits. Combined with BUS grants, this is the government's dual push-pull approach to scaling the market.
What HEM Changes for Heat Pump Assessment
· Analysis: HEM Guide
The Home Energy Model introduces variable COP modelling that runs across real weather data at half-hourly timesteps, accounting for outdoor temperature, flow temperature, and part-load behaviour. SAP, by contrast, uses a fixed Seasonal Performance Factor that produces the same output regardless of climate zone or system sizing.
The practical consequence is that HEM rewards well-specified, correctly sized systems while penalising undersized or poorly matched installations. Two identical homes with differently specified heat pumps will receive different HEM ratings whereas SAP would rate them the same.
What this means: The sales data matters more under HEM than under SAP. SAP could not distinguish between a well-specified and a poorly specified heat pump; HEM can. As the market scales, installation quality becomes a compliance factor, not just a performance one.
New Builds Already Delivering: £420/Year Savings
Data from the Home Builders Federation's “Watt a Save” report, produced in partnership with Octopus Energy, shows that new-build homes save £420 per year on energy compared with older stock. New builds are 21% cheaper to run (£1,574/year vs £1,995/year), and homes rated A or B are 39% cheaper than those rated F or G (a saving of £618 per year).
The report draws on EPC registrations to December 2025 and confirms that nearly all new-build homes achieve an EPC rating of A or B. The data provides real-world evidence for what HEM's more detailed modelling is designed to capture.
What this means: FHS-compliant homes with heat pumps will widen this performance gap further. Under HEM's more accurate modelling, the energy cost savings from heat pumps in well-insulated new builds will be more visible to buyers in the new EPC metrics.
Background & Context
The UK's heat pump market sits at a critical juncture. The Future Homes Standard government response is still awaited (expected “early 2026”), but when it arrives, heat pumps will be the default heating system for virtually all new homes. The policy architecture (BUS grants, CHMM obligations, and the FHS itself) is designed to create both supply-side and demand-side pressure to scale the market.
What makes this moment different from previous heat pump policy ambitions is the assessment methodology change. HEM's improved heat pump modelling (variable COP, real weather data, half-hourly timesteps) means the assessment methodology will finally match the technology's actual performance. This is a significant improvement over SAP's simplified approach, which used a single fixed efficiency figure regardless of how well a system was specified or installed.
For the heat pump market to reach 450,000 per year, the gap between record sales and the required trajectory needs to close rapidly. The policy tools are in place; the question is whether they are sufficient and whether consumer confidence, installer capacity, and grid infrastructure can keep pace. Our Timeline & Status page tracks the key milestones.
What to Watch Next
- HEM EPC consultation closes 18 March 2026: band boundaries for the new metrics are still being decided
- CHMM Year 2 launches 1 April 2026: the 8% target takes effect, requiring manufacturers to hit their heat pump sales obligations
- FHS government response: still awaited, will confirm heat pump requirements for new builds and finalise the relationship between HEM and Part L compliance
- BUS air-to-air grant goes live April 2026: the £2,500 grant opens the scheme to more property types including flats and smaller homes
Frequently Asked Questions
How many heat pumps does the UK need to install by 2030?
The government's Warm Homes Plan targets 450,000 heat pump installations per year by 2030. In 2025, the UK sold 125,037 units, a record, but well below the trajectory required. Reaching 450,000 by 2030 would require roughly 33% compound annual growth, yet actual growth slowed from 56% in 2024 to 27% in 2025. See our Timeline & Status page for key milestones.
What grant is available for heat pumps in 2026?
The Boiler Upgrade Scheme (BUS) provides grants of £7,500 for air source and ground source heat pumps, and £2,500 for air-to-air heat pumps (eligible from April 2026). Heat batteries now also qualify for a £2,500 grant. The scheme has been extended to at least 2030. Over 70,000 installations have been supported, with more than £485 million paid out. See our guide for homeowners for how to apply.
How does HEM model heat pumps differently from SAP?
HEM uses variable coefficient of performance (COP) modelling across real weather data at half-hourly timesteps, accounting for outdoor temperature, flow temperature, and part-load behaviour. SAP uses a fixed Seasonal Performance Factor that gives the same result regardless of climate zone or system sizing. Two identical homes with differently specified heat pumps receive different HEM ratings; SAP would rate them the same. See our heat pump technical reference for full details.
What is the Clean Heat Market Mechanism?
The Clean Heat Market Mechanism (CHMM) is a government scheme requiring boiler manufacturers to ensure a proportion of their sales are heat pumps. Year 2 starts 1 April 2026, setting the target at 8% of relevant boiler sales. From 2026/27, the Microgeneration Certification Scheme (MCS) becomes the sole certification body for all government-funded clean heat measures, including the BUS, ECO4, and the Warm Homes programmes.
Related Pages
How HEM Models Heat Pumps
Variable COP, real weather data, and what it means for heat pump ratings under the new methodology.
FHS Construction Changes for Builders
Heat pumps, airtightness, MVHR, and solar PV: what changes on site under the Future Homes Standard.
EPC Changes for Homeowners
How the new four-metric EPC system affects property values, selling, and improvement recommendations.
Timeline & Status
Live tracker of HEM, FHS, EPC reform, and heat pump policy milestones.