A new €2,000 Government grant for homeowners replacing fossil-fuel heating systems with heat pumps has come into effect, but the cost of a full retrofit could still leave some households facing significant bills.

The boiler scrappage grant became available as part of a wider package of changes to the Government’s home energy supports, aimed at reducing household energy costs and encouraging homeowners to move away from fossil-fuel heating.

Eligible homeowners replacing an oil, gas, electric storage or solid-fuel heating system with an energy-efficient heat pump can receive an additional €2,000 towards the cost of the upgrade.

The new payment is added to existing Sustainable Energy Authority Ireland (SEAI) supports. Homeowners can receive up to €10,500 towards a heat pump system, with a further €2,000 available for central heating upgrades where required. Combined with the new boiler scrappage grant, this brings the maximum available support for many houses to €14,500.

However, the maximum grant does not mean every homeowner will receive €14,500. SEAI states that grant payments cannot exceed the total cost of eligible works, while the overall cost of installing a heat pump can vary significantly depending on the property and the work required.

Neil McCabe from DECARB Contracts, a retrofitter and consultancy, said the heat pump itself is not necessarily the most expensive part of the process. The cost can instead be driven by the work needed to adapt a house to the new heating system, including pipework and underfloor heating.

McCabe said the cost of a heat-pump retrofit can be around €20,000 before grants, although this can vary substantially between properties.

Speaking on the current cost of upgrading McCabe said these new grants wouldn’t be enough to influence homeowners. “If a house is already going to be done up, this is enough to influence, but otherwise no.”

The Government estimates that replacing a fossil-fuel heating system with a heat pump could result in energy savings of up to €185 a year.

The wider package also includes increased support for solar PV, battery storage and insulation. The Government estimates that households could save up to €878 a year depending on the measures installed and the property.

McCabe expects the new grants to increase demand for heat-pump installations, but said increased competition between suppliers should limit any rise in prices.

“There are so many different suppliers that costing needs to stay competitive,” he said. “Everyone wants to offer a great price.”

He said the new grants were “going in the right direction”, but argued that more support may be needed as the cost of materials and building work continues to rise.

For homeowners who are not already planning a major retrofit, the remaining cost can still be a significant consideration.

Brigid Doyle, a homeowner in Kildare, said she currently has solar panels which are serviced alongside her boiler.

“I have solar panels… I get them serviced alongside my boiler, I don’t know if that is covered if I upgrade,” she said.

Doyle also said she was not convinced that the remaining upfront cost after grants made upgrading to a heat pump attractive.

Her concerns highlight some of the practical and financial considerations facing homeowners beyond the headline value of the new grant, including ongoing servicing arrangements and the cost of replacing a functioning heating system.

The changes come as demand for home energy upgrades continues to rise. SEAI says more than 100,000 applications have been processed through its schemes since the beginning of 2026, with applications for some supports more than doubling compared with the previous year.

More than 287,000 home energy improvements, including measures such as insulation, solar and heating upgrades, have been supported through SEAI schemes since 2019.

The Government has presented the new measures as a way of helping households reduce energy bills while improving Ireland’s energy security. The package was developed through the National Energy Affordability Taskforce.

However, the experience of homeowners and installers suggests the €2,000 boiler scrappage payment may only address part of the financial barrier to switching from fossil-fuel heating.

With the new supports now available, homeowners considering a heat pump will still have to weigh the available grant against the cost of the wider retrofit and any additional work required.

SEAI was contacted for comment on the new grant, the expected uptake and the costs facing homeowners, but has not responded.