Reports that the government is preparing to slash funding for its flagship heat pump subsidy to boost national defence spending have triggered mounting pressure from green campaigners, energy analysts and industry leaders on Andy Burnham’s administration.
Under the Boiler Upgrade Scheme, households are eligible for grants of up to £9,000 to help cover the upfront installation costs of clean heating systems such as air-source heat pumps. These systems are significantly more expensive to install than traditional gas boilers.
Heat pumps, which work by absorbing heat from the outside air using electricity - akin to a refrigerator running in reverse - have been championed by ministers as essential to meeting the UK's net-zero climate commitments and insulating households from soaring energy prices.
Record applications but slowing growth
While government incentives fuelled a record 56% surge in retrofit installations in 2024, growth slowed considerably in 2025, recording just a 7% increase in existing buildings. A record number of homes have applied for the scheme this year, with 8,150 applications submitted in July alone - an 81% increase on June.
Now, following a report by The Guardian indicating that ministers are seeking savings from low-carbon initiatives to divert into the defence budget, environmental advocates warn that cutting funding could collapse the emerging sector entirely.
Industry leaders condemn proposal
Key stakeholders across energy, climate policy and environmental advocacy have swiftly condemned the reported proposal, describing it as "remarkably short-sighted" during an ongoing global energy crisis.
"Britain’s exposure to gas cost the Treasury £80 billion in the last energy crisis," said Greg Jackson, founder and chief executive of Octopus Energy. "The boiler upgrade scheme budget is just 0.5% of that, and is key to getting off gas. It’d be remarkably short-sighted to try to enhance our defence by cutting our path to security."
He added: "It’d also put thousands of skilled jobs at risk - the very people making Britain safer and cleaner in every postcode."
Madeleine Gabriel, Director of Sustainable Future at Nesta, said: "Cutting Britain’s flagship low-carbon heating scheme would leave the country’s whole approach to climate and energy in disarray. Cuts to the scheme could effectively wipe out that whole industry, punishing many businesses and heating engineers who have followed the Government’s direction to invest in cleaner heating."
National security concerns raised
Mel Evans, Head of Climate at Greenpeace UK told the Press Association (PA): "Making Britain more dependent on the oil and gas imports fuelling armed conflicts across the globe will only undermine our national security. Why would the Government cut funds benefiting ordinary families instead of taxing polluters fairly?"
Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU), added: "At exactly the moment that our dependency on gas is driving up our bills and harming our economy, reports suggest Government support for heat pumps could be cut. Heat pumps are a matter of national security as gas will increasingly be imported from the likes of Trump as the North Sea continues its inevitable decline."
Campaign group End Fuel Poverty also warned that slashing support would lock families into volatile gas markets, leaving households open to continued price shocks.
Government response
A spokesperson for the Department for Energy Security and Net Zero (DESNZ) addressed the concerns, indicating that final spending allocations for defence will be finalised later in the year.
"Savings for the defence investment plan are a small part of DESNZ’s overall budget, which saw a significant uplift at the spending review," they said. "We will set out how we will fund essential investment in our national security this autumn."
