How To Offer Finance For Ground Source Heat Pumps

Finance, framed for the way you sell

Customer finance is simply a way for buyers to spread the cost of a ground source heat pump (GSHP) rather than paying the full amount upfront. For your business, it turns a high-value, considered purchase into a manageable monthly decision, while you can still be paid promptly through the finance provider once installation milestones are met. In a market shaped by grants, rising energy awareness and tight household budgets, finance also helps you present GSHPs as a planned upgrade, not a painful expense. Done well, it reduces drop-off after surveying and quoting, and it gives your team a consistent, transparent way to discuss affordability.

The aim is not to “sell debt” - it is to make the true net cost and payment options clear.

Why buyers lean on finance for GSHPs

GSHPs deliver long-term efficiency, but the upfront cost can feel disproportionate compared to a boiler replacement. Typical installed prices often sit around £20,000 to £25,000, and while the Boiler Upgrade Scheme (BUS) in England and Wales can reduce that by £7,500 (paid to the installer and deducted from the invoice), the remaining balance is still significant for many households and some small businesses. Scotland’s support can be even more compelling, with Home Energy Scotland offering grant funding for heat pumps up to £7,500 (up to £9,000 with a rural uplift) and the option of an interest-free loan up to £7,500. Finance bridges the gap between grant-reduced pricing and what a customer can comfortably commit to each month.

How finance lifts conversion and order value

Offering finance tends to increase sales because it changes the comparison your customer is making. Instead of weighing a large lump sum against doing nothing, they weigh a monthly payment against their current heating costs, expected savings and comfort improvements. Many installer-backed loans in the UK run over 5 to 10 years and are commonly marketed around 6.9% to 9.9% APR, sometimes with a deposit requirement, which gives buyers predictable repayments. Some providers also support promotional 0% deals for 24 to 36 months (subject to credit and affordability), which can be a strong hook when paired with the BUS grant. The practical impact for you is fewer stalled enquiries, better close rates after survey, and more confidence to bundle complementary works such as controls or insulation.

Typical transaction values (what customers really finance)

What you can put on finance

1. Ground source heat pump supply and installation (including commissioning)

2. Ground loop groundworks (trenches or boreholes) where included in scope

3. Heat emitters and system upgrades (radiators, underfloor heating manifolds)

4. Hot water cylinder and associated plumbing upgrades

5. Controls, thermostats and smart monitoring

6. Electrical works (consumer unit upgrades, isolation, cabling)

7. Complementary energy-efficiency works where bundled (for example, insulation as part of a wider project)

The compliance essentials you cannot ignore

If you introduce customers to a lender, you must ensure your process is compliant, clear and not misleading. Financial promotions must be fair, clear and not deceptive, and any representative APR, fees, deposit requirements and key exclusions should be presented prominently. You should avoid implying guaranteed acceptance, and you should explain that credit is subject to status and affordability. Customers need adequate pre-contract information and a proper opportunity to review terms before committing. If you are not authorised by the FCA, you must operate under an appropriate model and permissions.

Introducer and broker models, explained in plain English

Most installers do not want to become a full finance lender, and they do not need to. Under an introducer model, your business introduces the customer to a finance broker or lender, and the regulated party handles the credit application, underwriting and agreement. Your role is typically to present the option, share key information and pass the customer through a compliant journey. This can be effective because it keeps you focused on surveying, designing and installing while a specialist manages the regulated steps. The alternative is to obtain your own permissions and manage more of the process in-house, which increases control but also increases compliance responsibility.

A clear customer journey you can build into every quote

1. Quote the net price properly: show the gross install cost and then the expected grant deduction (for example, BUS in England and Wales is deducted from the invoice and paid to the installer).

2. Offer simple choices: present 2 to 3 finance terms (for example, 5, 7 and 10 years) with an indicative monthly payment and the representative APR where applicable.

3. Explain deposits and eligibility: be explicit about any deposit expectations and that credit is subject to status and affordability.

4. Capture consent to proceed: the customer chooses a preferred option and confirms they want to apply.

5. Pass to the regulated application: the broker or lender collects the customer’s details and completes checks.

6. Confirm approvals and set expectations: if approved, confirm instalment amount, term, total amount payable and key dates.

7. Align finance with project milestones: ensure the agreement and any installer payment schedule match survey, install and commissioning stages.

8. Reinforce aftercare and guarantees: customers are calmer borrowers when servicing, warranties and performance expectations are clearly set out.

Standout line: If your quote ends at a lump sum, you are forcing the customer to solve affordability alone.

Next step suggestions:

• Add a “Net price after grants” line to every proposal.

• Train your team to discuss monthly payments with the same confidence as heat loss and flow temperature.

• Use a short finance FAQ in your follow-up email to reduce call-backs.

Getting set up with Kandoo

Kandoo is a UK-based retail finance broker, so our role is to help you offer a finance solution that fits the way your customers buy, without you trying to become a lender. We work with you to shape a proposition that makes sense for GSHP transaction sizes, including longer terms where needed and options that support competitive promotional messaging where appropriate. The goal is a smooth, compliant handover from your quote to an application journey that feels like part of your brand experience, not a separate hurdle. Once live, you can present finance alongside grant-reduced pricing so customers can make a decision based on real monthly affordability.

FAQs

How does the £7,500 Boiler Upgrade Scheme grant work for GSHPs?

In England and Wales, the BUS provides a £7,500 capital grant towards eligible ground source heat pump installations. It is paid to the installer and deducted from the customer’s invoice, reducing the amount they need to fund.

Is there different support in Scotland?

Yes. Home Energy Scotland offers grant funding for heat pumps up to £7,500, rising to £9,000 with a rural uplift, plus an optional interest-free loan up to £7,500. This can make “low upfront cost” packages more achievable for eligible customers.

What APR do customers typically see for heat pump finance?

Many installer and retailer loans in the UK are commonly positioned around 6.9% to 9.9% APR over terms such as 3 to 10 years, depending on the lender, the product and the customer’s credit profile.

Can we offer 0% finance for ground source heat pumps?

Some finance providers support promotional 0% deals for 24 to 36 months, subject to credit checks and affordability. If you promote 0%, you must also communicate any deposits, fees and what happens at the end of any promotional period.

Do customers need to pay a deposit?

Often, yes. Some products require a deposit (commonly around 15% in parts of the market), while other offers may be structured with no advance payment. The right approach depends on lender criteria and what fits your average order value.

Will finance reduce cancellations after survey?

It often helps, because the customer can decide based on a monthly figure and a clear net price after grants. That reduces the “sticker shock” that can appear once groundworks and final design are confirmed.

Can finance cover groundworks and boreholes?

In many cases, yes, provided the works are part of your contracted scope and the finance product supports that category of spend. Clear scoping and documentation are important.

What about shared ground loop or developer projects?

Some models use third-party funding to cover shared ground array infrastructure, reducing upfront costs. Finance can then focus on the in-home system or any remaining customer contribution.

Are we allowed to mention grants alongside finance?

Yes, and it is usually helpful, as long as it is accurate and presented clearly. Customers should understand what reduces the invoice immediately (such as BUS deducted by the installer) versus what depends on eligibility, location or funding availability.

How quickly can we start offering finance?

Timelines vary by readiness and integration, but the practical path is to define your typical basket, pricing range and preferred customer journey, then implement compliant materials and a handover process so your team can begin presenting monthly options confidently.