Interest free loans for heat pumps in Scotland

Interest free loans of up to £10,000 from the Scottish Government are available for Source Energy ground and air source heat pump installations in Scotland.

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This is a first-come first-served loan available for owner-occupiers of residential existing buildings and self-builders whom will use the property as their principle, private residence.

Both the heat pump installer and heat pump product must both be MCS approved – You can be reassured that by using Source Energy your ground or air source heat pump will meet this requirement.

The interest free loan can cover up to 75% of the total cost of the heat pump installation. For example you could borrow £8,250 towards the installation of a £12,000 system. Heat pump technologies have a maximum loan repayment period of 12 years.

The monthly repayments will depend on how much you borrow and what repayment period you choose – but you can always make extra payments or pay-off the loan at any point without penalty.

To apply for the loan you must call Home Energy Scotland directly on 0808 808 2282.

You will be required to submit an ‘energy report’ (Green Deal Assessment report, Energy Performance Certificate (EPC), or a report provided by Home Energy Scotland) and the heat pump quotation with your application. Request a ground or air source heat pump quote here »

In addition to this loan you could benefit from the Renewable Heat Incentive (RHI).

If you have any questions, you can speak to our Scotland heat pump team by calling 0800 865 4328.

Home Energy Scotland – interest free renewables loan FAQs

I have an old application form what should I do?

If you have recently been sent an application form but have not yet submitted it then a new application form (once available) will be sent to you by Home Energy Scotland which includes details of the scheme extension. Please do not send in an application form with version number X.XXHESRL2642 or lower (the version number can be found on the front cover of the application form)

Can Source Energy apply for the loan on my behalf?

Unfortunately Home Energy Scotland have specified that installers cannot apply for the loan on behalf of the homeowner. You will need to call Home Energy Scotland directly on 0808 808 2282.

Can I apply for the loan retrospectively?

No, the loan must be applied for before work has been started on the installation of the heat pump. To avoid disappointment our area sales manager for Scotland will discuss whether you could be eligible for the Home Energy Scotland loan, during the initial stages of providing you a quote.

How long will it take for my loan to be approved?

The Energy Saving Trust aim to send you an offer letter within 15 days of receiving your application. You then must sign and return the agreement within 14 days. The heat pump installation can then start following you receiving the loan offer.

Please note you cannot apply for the loan until all required planning permissions and approvals are in place.

The loan will then be available for 90 calendar days from the date of the loan offer.

Can I apply for multiple loans to install other renewable technologies?

The Energy Savings Trust website outlines the various technologies eligible for the Home Energy Scotland Loan. You can apply for a maximum of two loans per household for renewable technologies. However you cannot apply for a second heating system.

Who can get the loan?

These loans are available for owner occupiers in Scotland, this includes self-builders constructing a new build property for their own private residence.

Loans are not available for second homes, holiday homes or properties which are rented out.

Loans are not available for property developers who intend on selling the home.

Why is an energy report required?

This is to identify which energy efficiency measures and renewable technologies are suitable for your property.

You can request that the loan covers the cost of up to two Green Deal assessments, or one Green Deal assessment and one EPC up to £150. Unless you are also applying for the Green Homes Cashback grant to cover this cost.

A condition of the loan is that you install energy efficiency measures including cavity and loft insulation, where appropriate, heating controls and low energy lighting. By having a Green Deal Assessment – you can apply for the Green Homes Cashback grant scheme from the Scottish Government on top of this loan to cover these costs.

Can I still apply for the RHI?

Yes, you can still apply for the Renewable Heat Incentive (RHI) – this could help to cover the loan repayments. However, eligibility criteria may differ from this loan scheme, you can see the latest information on the RHI here »

Where can I find out more information on interest free loans for heat pumps in Scotland?

Visit the Energy Saving Trust website or call Home Energy Scotland on 0808 808 2282.

Whilst we aim try to keep the content of this website up-to-date, Source Energy are not responsible for changes and amendments to third party grant funding schemes or their applicable terms and conditions. We recommend you verify all grant funding information with each funding organisation prior to any funding commitment you may make.