Home Upgrade Grant (HUG2): Up to £25,000 for Off-Gas Homes
The Home Upgrade Grant provides up to £25,000 per household for energy efficiency upgrades in homes not connected to the mains gas grid. It covers insulation, heat pumps, solar panels, and more. Unlike ECO4, which is funded by energy suppliers, HUG2 is funded directly by the government and delivered through local councils. If you heat with oil, LPG, electric heating, or solid fuel, this is the most generous grant scheme available.
Who qualifies
| Requirement | Detail |
|---|---|
| Gas grid status | Must NOT be connected to mains gas |
| EPC rating | D, E, F, or G |
| Household income | Below £36,000 or receiving a means-tested benefit |
| Property type | Owner-occupied or private rented (with landlord permission) |
| Location | Must be in an area where your local council runs a HUG2 scheme |
Income thresholds may vary by local authority. Some councils use different criteria under their local scheme rules.
Use our grant eligibility checker to see if you qualify for HUG2, ECO4, or both.
What is covered
| Measure | Typical value | Annual saving |
|---|---|---|
| Loft insulation (270mm) | £400 to £800 | £135 to £355 |
| Cavity wall insulation | £400 to £1,500 | £170 to £395 |
| Solid wall insulation (external or internal) | £4,000 to £14,000 | £225 to £590 |
| Underfloor insulation | £500 to £2,500 | £40 to £115 |
| Air source heat pump | £9,000 to £13,000 | £300 to £600 vs oil |
| Solar PV panels (up to 4 kW) | £4,500 to £6,000 | £400 to £550 |
| High-efficiency windows and doors | £3,000 to £8,000 | £100 to £200 |
| Draught-proofing | £200 to £400 | £60 to £125 |
| Heating controls | £150 to £350 | £50 to £120 |
Savings from Energy Saving Trust. Actual measures installed depend on your property assessment.
HUG2 uses a whole-house approach. A retrofit coordinator assesses your property and designs a package of measures tailored to your home. You do not choose individual measures; the coordinator recommends the optimal combination based on your property's heat loss profile.
HUG2 includes heat pumps
Unlike ECO4, HUG2 explicitly funds heat pump installations for off-gas homes. If you currently heat with oil or LPG, a heat pump through HUG2 can eliminate your fuel deliveries entirely. See our heat pump running costs guide for the savings comparison.
How to apply
Step 1: Contact your local council and ask if they are running a HUG2 or Warm Homes scheme. Not every council participates. If yours does not, you may still qualify for ECO4 or the Boiler Upgrade Scheme.
Step 2: The council (or their appointed managing agent) checks your eligibility based on income, property EPC, and gas grid status.
Step 3: A qualified retrofit assessor visits your home and records everything needed for the whole-house plan: insulation levels, heating system, windows, ventilation, and building fabric. This visit is free.
Step 4: A retrofit coordinator designs your improvement package and arranges installation through the council's approved contractor network. All work must meet PAS 2035 quality standards and be delivered by TrustMark-registered installers.
Step 5: Installation happens. Depending on the package, work may take 1 day (insulation only) to 2 weeks (full retrofit including heat pump and solar). You pay nothing.
Step 6: A new EPC is produced showing your improved rating. The retrofit coordinator signs off the work and provides a handover pack with warranties and documentation.
Check for scams
HUG2 is always delivered through your local council, not through cold callers or door-to-door salespeople. Never pay money for a HUG2 assessment or application. If someone contacts you offering "free government insulation" and asks for a fee, it is a scam. Verify any approach through your council's website.
HUG2 vs ECO4 vs BUS
| Feature | HUG2 | ECO4 | BUS |
|---|---|---|---|
| Funding source | Government (via councils) | Energy suppliers | Government (via Ofgem) |
| Maximum value | Up to £25,000 | Up to £10,000+ | £7,500 |
| Gas grid homes | No | Yes | Yes |
| Off-gas homes | Yes (primary target) | Yes | Yes |
| Income requirement | Under £36,000 or on benefits | On qualifying benefits | None |
| EPC requirement | D, E, F, or G | D, E, F, or G | None |
| Includes heat pumps | Yes | Rarely | Yes (primary purpose) |
| Includes solar | Yes | No | No |
You can combine schemes. For example, HUG2 for insulation and solar, plus BUS for heat pump if HUG2 does not cover it in your area.
Read our full guides: ECO4 Scheme Explained and Boiler Upgrade Scheme Guide. Use our grant eligibility checker to see which schemes you qualify for.
Off-gas heating costs compared
If you are off the gas grid, you are likely paying significantly more for heating than gas-connected homes. Here is how common off-gas heating systems compare.
| Heating system | Annual cost (3-bed semi) | Annual cost with heat pump | Saving |
|---|---|---|---|
| Oil boiler | £1,200 to £1,600 | £662 (HP tariff) | £538 to £938 |
| LPG boiler | £1,400 to £1,800 | £662 (HP tariff) | £738 to £1,138 |
| Electric storage heaters | £2,200 to £3,000 | £662 (HP tariff) | £1,538 to £2,338 |
| Electric boiler | £2,500 to £3,500 | £662 (HP tariff) | £1,838 to £2,838 |
Oil at ~7p/kWh. LPG at ~8.5p/kWh. Electricity at 24.5p/kWh. Heat pump COP 2.9 on HP tariff ~16p/kWh. 12,000 kWh heat demand.
Off-gas homes save the most by switching to a heat pump. If HUG2 covers the installation cost, the entire saving goes straight into your pocket from day one. Read our electric boiler vs heat pump guide for the detailed comparison.
Track your savings with an energy monitor. Manage your new heating system with a smart thermostat.
Frequently asked questions
What is the Home Upgrade Grant?
A government scheme providing up to £25,000 for off-gas-grid homes to improve energy efficiency. Covers insulation, heat pumps, solar, and more. Delivered through local councils.
Who qualifies?
Off-gas homes with EPC D to G, household income under £36,000 or on means-tested benefits, in an area where the council runs the scheme. Use our grant checker.
How is HUG2 different from ECO4?
HUG2 targets off-gas homes with up to £25,000 via councils. ECO4 targets all fuel-poor homes with up to £10,000 via energy suppliers. HUG2 includes heat pumps and solar; ECO4 rarely does.
What does it cover?
Insulation (loft, wall, floor), heat pumps, solar PV, windows, doors, draught-proofing, and heating controls. The package is tailored to your property.
How do I apply?
Contact your local council. They manage applications and arrange assessments. You cannot apply directly to the government. Check our grant checker first.
Data sources
Scheme details from GOV.UK. Savings from Energy Saving Trust. Energy prices from Ofgem Q1 2026 price cap.