2026 Update: PSDS & IETF closed. AIA gives 100% year-one relief on solar. 2026 active stack still delivers 40–60% effective subsidy. See 2026 grants →

Heat Pumps

Commercial Heat Pump Grants UK

Air source, ground source and high-temperature heat pumps for UK commercial and public sector buildings. Salix Finance interest-free loans for NHS, schools and councils. The Annual Investment Allowance for private sector. Solar-powered heat at 1–2p/kWh effective cost.

3.5–5×
Heat output per unit of electricity (CoP)
0%
Interest on Salix Finance loans
25%
Year 1 CT relief via AIA
Free thermal survey
Independent
4.5yr
Avg Payback
Always check your installer is MCS-certified
How it works

How grants apply to heat pumps

1
01

Free thermal survey

We survey the building fabric, current heating system, hot water demand and flow temperature requirements. This determines whether air source, ground source or high-temperature HP suits your site.

2
02

Salix or the Annual Investment Allowance path

Public sector bodies take the Salix BAU loan route — we prepare the funding application. Private sector takes the Annual Investment Allowance — 25% CT relief in Year 1 with no application required.

3
03

Solar integration option

For buildings with heating demand during solar generation hours, we design a combined solar + heat pump system to deliver heat at 1–2p/kWh effective cost.

Heat pump funding routes

Annual Investment Allowance

100% first-year CT relief

Commercial heat pump systems qualify as plant and machinery for the Annual Investment Allowance. 100% of capex deducted from corporation tax in Year 1. On a £150k ASHP installation: £37,500 CT relief at 25%. Permanent, no cap, applies to air source, ground source and high-temperature heat pumps.

Salix Finance

Interest-free public sector loans

NHS trusts, schools, councils and universities access Salix BAU loans for heat pumps. Interest-free, repaid from energy savings over 5–12 years. Open-ended. PSDS Phase 4 closed November 2024 but Salix BAU remains live with no end date. Projects from £50k to £3m+.

Solar Integration

Solar-powered heat at near-zero cost

A solar + heat pump system uses daytime PV generation to run the heat pump compressor. CoP 3.5–5.0 means 1 kWh solar generates 3.5–5 kWh of useful heat. Particularly effective in buildings with continuous heating demand — hospitals, leisure centres, food production, hospitality.

Heat pumps by location

Local Salix routes, building stock assessment and DNO connection info for your city:

Aberdeen
North-East Scotland
Belfast
Northern Ireland
Birmingham
West Midlands
Bristol
South West England
Cambridge
East England, Cambridgeshire
Cardiff
South Wales
Coventry
West Midlands
Dundee
Scotland, Tayside
Edinburgh
Lothian, Scotland
Glasgow
West Central Scotland
Inverness
Scotland, Highland
Kingston upon Hull
Humber Region, East Riding
Leeds
West Yorkshire
Liverpool
Merseyside
London
Greater London
Manchester
Greater Manchester
Milton Keynes
South East England, Buckinghamshire
Newcastle upon Tyne
North East England
Nottingham
East Midlands
Oxford
South East England, Oxfordshire
Plymouth
South West England, Devon
Portsmouth
South East England, Hampshire
Reading
Berkshire, Thames Valley
Sheffield
South Yorkshire
Southampton
South East England, Hampshire
Stoke-on-Trent
Staffordshire, West Midlands
Sunderland
North East England
Swindon
South West England, Wiltshire
Wakefield
West Yorkshire, Yorkshire and the Humber
Wolverhampton
West Midlands, Black Country

Commercial heat pump grant FAQs

What heat pump grants are available for commercial buildings in the UK?
For public sector bodies (NHS, schools, councils, universities) — Salix BAU interest-free loans, repaid from energy savings over 5–12 years. PSDS Phase 4 closed November 2024 but Salix BAU remains open with no end date. For private sector — the Annual Investment Allowance (25% CT relief in Year 1, no application) for systems co-located with solar. The Low Carbon Skills Fund covers Heat Decarbonisation Plans to keep public bodies ready for any future PSDS Phase 5.
How much does a commercial heat pump cost in the UK?
Air source heat pump installations for commercial buildings cost £25,000–£150,000+ depending on heating demand and building size. Ground source systems cost 2–3× more but deliver better efficiency in cold climates. After the Annual Investment Allowance (25% CT saving in Year 1) for co-located renewable systems, the effective net cost is typically 55–60% of gross capex for a profitable private sector business.
Do commercial heat pumps qualify for Salix Finance?
Yes — NHS trusts, schools, academies, local authorities and universities can access Salix BAU loans for commercial heat pump projects, from £50,000 to £3m+. Interest-free, repaid from documented energy savings over 5–12 years. Application via the Salix online portal — we prepare and submit the application on behalf of public sector clients.
Can a commercial heat pump be powered by solar PV?
Yes — a solar + heat pump system uses daytime PV generation to run the heat pump compressor, delivering heat at 1–2p/kWh effective cost. A COP of 3.5–5.0 means 1 kWh of solar generates 3.5–5 kWh of useful heat. Particularly effective in continuous-load buildings — hospitals, leisure centres, food production facilities and hotels.
What is the payback period for a commercial heat pump?
Typical payback for replacing oil or LPG boilers is 4–7 years. Replacing gas is harder — 7–12 years given the current gas-to-electricity price spread. Salix-funded public sector projects effectively pay back from day one, as interest-free loan repayments are sized to match modelled energy savings. Solar-powered heat pump systems typically pay back in 4–6 years overall.
Free funding review

Free commercial heat pump survey

We assess heat demand, building fabric, DNO connection and full funding route. Thermal survey within one week, proposal in 24 hours.

Start Funding Review

No obligation. We don't charge for grant scoping.

Funding by asset class

The allowance depends on the asset, and most pages on this topic get it the wrong way round. Solar PV is special-rate expenditure (HMRC Capital Allowances Manual CA22335), so the 100% year-one route is the Annual Investment Allowance — Full Expensing is a main-rate measure and does not reach it. Battery storage, EV charging and heat pumps are Heat pumps for space or water heating are special-rate: AIA, then the 50% FYA. Standalone batteries are probably main-rate (full expensing for companies), but HMRC has no specific guidance; confirm with your adviser.

Free funding review

Find out which 2026 schemes your site actually qualifies for

What you get
  • 1. A short written funding note naming every scheme your site qualifies for in 2026 — and the ones it does not.
  • 2. Indicative system size and a capex band for your roof.
  • 3. Year-one tax treatment per asset in £ — solar is special-rate expenditure, so the route is the Annual Investment Allowance; heat pumps for building heating are also special-rate integral features, and standalone battery storage is probably main-rate plant (HMRC has no specific guidance, so confirm with your adviser). Most pages get this the wrong way round.
  • 4. Projected SEG export revenue at current rates.
  • 5. Any red-flag eligibility or DNO issues we can see up front.

Covers solar PV, battery storage, EV charging and commercial heat pumps — separately or as one bundled project. If your project is a heat pump or a battery rather than a roof, say so in the message box and the note is written against that asset instead.

What we will not do
  • · We do not pass your details to multiple installers.
  • · We do not run a lead auction, and your phone number is optional.
  • · No marketing lists, no unsolicited calls.
  • · We are an independent funding information service — not an installer.

Five questions. They are the eligibility test itself — scheme eligibility in 2026 turns on sector, tenure, site size and spend, so we cannot shortlist anything without them.

We reply from funding@commercialsolargrants.co.uk. A phone number is not required.