The electrification of home heating is a critical part of the UK’s decarbonisation efforts. In fact, according to the Seventh Carbon Budget, the country needs to install heat pumps in almost 23 million homes by 2050. This includes roughly 1.9 million units in Scotland and 1.3 million in Wales.

As it stands, the UK is not on track to meet this target, and the uptake of technologies like heat pumps varies dramatically across the country. In parts of Scotland, the share of households with a heat pump installed is as high as about one in nine. In rural Wales, there are places where 9% of homes have one. But elsewhere in the country – including cities like London, Edinburgh and Cardiff – fewer than 0.5% of households have a heat pump.

Uptake has also been volatile over time, with sharp increases in demand coinciding with changes to funding schemes. For example, as the deadline for the Renewable Heat Incentive (RHI) scheme approached in March 2022, installations surged as people scrambled to purchase their hardware before applications to the scheme closed.

Taken together, these findings tell us two things. First, where a household is in the country matters. How rural an area is and whether the building is connected to the wider gas grid plays an important role in driving heat pump uptake.

Second, the presence of financing schemes – as well as their removal – has an impact on home decarbonisation. This suggests that the impending removal of the Energy Company Obligation (ECO) scheme later this year could alter the UK’s electrification journey – with effects likely varying by place.

What shapes these disparities? The answer could reveal why the UK is so off track to meet its own goals, and shape our understanding of what needs to happen next.

Parts of Scotland and Wales are outperforming the rest of the UK when it comes to heat pump uptake. According to data from the MCS, most of the top performing local authorities by air source heat pump installs per household are in either Scotland or Wales.

If we take just the top 20 local authorities, seven are in Scotland and seven are in Wales. The top five is dominated by four Scottish areas and one in Wales. Top performers include Na h-Eileanan Siar, Orkney, Ceredigion and the Isle of Anglesey.

Let’s look at Scotland in a bit more detail. As with the rest of the UK, the rate of heat pump uptake varies by Scottish local authority. In Orkney, about one-in-ten households have an air source heat pump installed. In Na h-Eileanan Siar (also known as the Outer Hebrides), the share is one-in-nine. Both regions are off the gas grid (more on this later).

At the other end of the scale, there is low take-up in several of Scotland’s major cities. Just 0.41% of households in Edinburgh have a heat pump. The figure is 0.31% in Glasgow. Much of each of these areas are conversation areas, making heat pump deployment more challenging due to the extra paperwork required.

It’s a similar story in Wales, with heat pump take-up varying substantially by local authority. In the Isle of Anglesey, 7.1% of households have a heat pump installed. The best performing region is Ceredigion in west Wales, where 9.2% homes have a heat pump.

As with Scotland, Wales’s major cities lag the more rural areas. In Swansea only 0.67% of households have an air source heat pump installed. The figure is just 0.24% in Cardiff.

One factor that affects the viability of heat pumps is whether or not a household is connected to the gas grid. People whose properties are not on the grid often use heating oil to warm their homes. Oil prices are notoriously volatile, meaning these homes are especially vulnerable to price movements caused by global macroeconomic shocks (like the Iran war, for example).

Oil has to be arranged to be delivered via lorry, and then stored in a large tank. Households using heating oil don’t have the same consumer protections that mains gas and electricity consumers have – in particular there is no price cap. Burning it also creates substantial emissions. For many consumers, being off the gas grids means choosing between oil and a heat pump (or some other alternative). In many cases, heat pumps end up being the answer.

This dynamic plays out in the data. Using figures from MCS and DESNZ, we can plot the share of homes off the gas grid against the share with a heat pump for local authorities across the UK. A moderate positive correlation emerges: a larger share of homes without gas is associated with a greater uptake in heat pump technology in the region.

Our top performing spots in Scotland and Wales are all above the trend line. In Scotland, Na h-Eileanan Siar has a greater share of heat pumps than its share of homes off the gas grid would imply. This suggests that there are several other factors beyond gas grid status that shape consumer preferences for electric home heating solutions.

The story so far is that heat pump deployment varies dramatically across the UK, and the nature of the housing stock goes some way in explaining why different local authorities have varying rates of heat pump uptake.

But this is only part of the tale. Funding schemes also shape demand for home heating solutions, and the introduction – and, indeed, the removal – of various schemes over the years has had a demonstrable impact on consumer choices and wider home decarbonisation trends.

Plotting installations over time helps shine light on the impact of funding schemes on heat pump uptake. Starting with the UK as a whole, we can see a sharp spike in MCS certified air source heat pump installations in the run-up to the Renewable Heat Incentive (RHI) funding scheme deadline.

The RHI scheme – which offered variable, performance-based financial support for heat pumps – came to an end on 31 March 2022. In the data, a dramatic surge in installs could well reflect a burst of activity as consumers, installers and developers rushed to submit funding applications before the deadline.

Data for Na h-Eileanan Siar provides further evidence for the impact of funding schemes. Between 2016 and 2020, an average of 74 air source heat pumps were installed each year. But from 2021 to 2025, the average yearly installation rate jumped to 191 – well over double.

One factor that may have contributed to this post-2021 uptick could be the Home Energy Scotland (HES) scheme. From late-2020 it has offered strong incentives to homeowners. Initially a cashback scheme, since 2022 the scheme has offered grants of £7,500 (£9,000 for qualifying rural homes) for heat pumps, alongside up to £7,500 in interest-free loan.

Turning to Wales, the pattern is slightly more pronounced. In place of Scotland’s HES scheme, Welsh households have access to the UK Government’s Boiler Upgrade Scheme (BUS). In the Welsh data, there is a sharp increase in installations following the introduction of the £5,000 BUS grant in May 2022. This was revised up to £7,500 in November 2023.

Looking more closely at Ceredigion helps highlight the impact of the BUS scheme on heat pump uptake at local authority level. Between 2016 and 2022, an average of 130 heat pumps were installed each year. From 2023 to 2025, this jumped to 623 – almost a fivefold increase.

Various funding schemes have played a key part in driving up heat pump uptake across Scotland and Wales. To get a picture of how much these different policies have supported electrification, it is useful to zoom in on the schemes for each country.

Assessing funding in Scotland

From April 2023 to March 2025, the UK-wide ECO scheme and Scotland’s own HES programme accounted for the lion’s share of heat pump installations. At its peak in the first quarter of 2024, ECO applications alone were behind roughly half of Scottish heat pump installs.

The Warmer Homes Scotland (WHS) scheme tells another part of the story. Targeted at lower-income and vulnerable households, the idea behind WHS was to provide a national Scotland-wide scheme to those living in fuel poverty, giving them fully-funded home improvements that would reduce their energy bills.

The old version of the scheme primarily replaced broken kit – swapping out an old gas boiler with either a heat pump or a more efficient, modern gas unit. The new version of the WHS programme – which replaced the previous version in early 2023 – is based on a ‘whole house retrofit’ approach.

Even so, the 2024/25 WHS report shows that almost 5,000 gas boilers were installed via the scheme last year. In contrast, just 350 air source heat pumps were ordered.

Another scheme in Scotland is the Social Housing Net Zero Heat Fund (SHNZHF). Aimed at landlords renting out social housing, SHNZHF offers grants for people looking to retrofit existing properties. As well as offering funding for heat pumps and other clean heat solutions, the scheme also includes pots for insulation and double glazing.

Over the past few years, SHNZHF has dwindled in terms of its share of heat pump installs. This could be due to reported infefficiencies within the scheme, or the fact that it only covers 50% of costs, with social landlords having to cover the rest.

The final piece of the puzzle for Scotland is Area Based Schemes (ABS). This programme, where the Scottish Government allocates funding directly to local authorities who then decide which projects to award, has mostly focussed on making insulation improvements but has contributed a modest share of heat pump installs over the past couple of years.

Assessing funding in Wales

Measuring the contribution of different schemes in Wales is challenging. Data limitations across various programmes makes it difficult to paint a clear picture of the relative contribution of each policy. Even so, a rough analysis of the numbers implies that BUS and ECO have each played a major role in boosting uptake over recent years.

Starting with the BUS scheme (which also covers England), between May 2022 and March 2026 a total of 5,366 vouchers were awarded for heat pumps in Wales. Using the MCS figure of total installs for the same period implies that roughly one-in-four installations were funded via BUS.

Applying a similar logic to ECO, between January 2013 and December 2025 a total of 16,281 air source heat pumps were funded in Wales via the scheme. Comparing this with the corresponding total figure from MCS suggests that about 63% of installations were facilitated through ECO over the period.

What about our notable Welsh regions? Starting with Ceredigion and using the same method as above, 92% of heat pump installations in the local authority came from ECO. In contrast, roughly 56% in Swansea were facilitated by the scheme.

Even these rough calculations highlight that both BUS and ECO have been key factors in driving heat pump uptake in Wales. With the latter due to be wound down at the end of this year, it remains to be seen how other schemes may (or may not) fill the funding gap.

Other Wales-specific schemes such as Nest, Green Homes Wales and the Optimised Retrofit Programme (ORP) are much smaller players in terms of their overall contribution to Welsh home heating decarbonisation. There are also further challenges in terms of data availability, making it difficult to pin an accurate figure against these schemes in terms of their wider contribution in Wales.

For example, the ORP scheme only applies to social housing. As it stands, there is no way of measuring how many heat pumps it has contributed because all home decarbonisation actions are bundled together and a detailed evaluation has not been published yet.

Taking Nest (Wales’s scheme targeted at low-income households) as another example, only one out of the past seven reports has supplementary data tables on the types of measures funded by the scheme for the year in question. According to this documentation, Nest facilitated just 13 air source heat pump installations in the 2024-25 reporting year. Over the same period, the scheme supported 223 ‘heating systems’ – a term which appears to include boiler systems with radiators (although fuel type is unknown).

Despite the messiness of the data, it appears pretty clear that BUS, HES and ECO have been the key policy drivers behind heat pump uptake in Scotland and Wales. This matters because the ECO scheme is set to be wound up at the end of this year. And given that ECO specifically targets those with qualifying benefits such as Universal Credit, lower-income households across the UK, including in Wales and Scotland, could soon find it more challenging to access home decarbonisation support unless replacement schemes are set up very quickly

While the BUS/HES schemes also account for a large share of heat pump installs across both countries, users of these programmes still have to cover a proportion of the upfront costs of new kit. So, people who might have previously benefitted from ECO to upgrade their home heating for free are not necessarily going to be able to easily jump across to BUS (or HES in Scotland). While Scottish customers can access a £7,500 interest free loan via HES in addition to the grant, this money still needs to be paid back eventually.

DESNZ has new funding set aside for a low-income scheme to replace ECO, with the design process currently underway. It seems likely that DESNZ will design a new scheme for England only, meaning it will probably then be up to Scotland and Wales to develop and implement their own new schemes to reach low-income groups outside BUS/HES.

As policymakers, installers and consumers brace for the end of ECO in both Scotland and Wales, it’s worth reflecting on how much policy schemes of various types have affected UK home decarbonisation to date.

Of course, geographic housing stock factors – like being disconnected from the gas grid – are important drivers of heat pump uptake, as we can see in places like Ceredigion and Na h-Eileanan Siar. But they are only part of the story: without a range of support measures in place, targeting everyone from relatively financially comfortable owner-occupiers to those living in fuel poverty, the UK’s home decarbonisation journey could stall.

Following recent elections in both Scotland and Wales, a key task for the new governments is to identify how best to plug the gaps left by ECO. In Scotland, for example, the SNP will need to decide how best to tweak existing low-income housing support schemes so that they deliver more home decarbonisation (rather than being used to simply replace old or broken gas boilers). This could include mandating a minimum percentage of electrification technologies within the WHS delivery framework, or restricting gas boiler installations to only those properties where a clear 'hard-to-decarbonise' justification can be provided.

Looking to Scotland and Wales for broader lessons on the roles of both immovable geography and malleable heat pump financing policy is as important as ever, especially as the timer starts to run down on the ECO scheme. Of course, the impending end of the scheme does not mean the end of heat pump financing schemes. But policymakers – in Cardiff and Edinburgh as much as in Westminster – must ensure that the right systems are in place, whether that is new schemes altogether or changes to existing frameworks, to help households across all nations of the UK decarbonise quickly and affordably.