How To Offer Finance For Heat Pump Installations

Updated

May 7, 2026 12:03 PM

Written by Nathan Cafearo

A practical guide for UK installers to offer heat pump finance, using grants, low-APR examples and compliant customer journeys to boost conversions and average order value.

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Customer finance, explained in installer language

Customer finance is simply a way for your buyer to pay for a heat pump over time, while you receive payment upfront through an approved lender. For installation businesses, that changes the conversation from a single large price to an affordable monthly figure, which is often how homeowners budget for home improvements. It also helps you compete with national brands and energy suppliers that already package heat pumps with funding options, grants and incentives. In a market where the Boiler Upgrade Scheme can reduce costs by £7,500 in England and Wales and heat pumps benefit from 0% VAT on supply and installation, finance becomes the bridge between a subsidised quote and an easy yes.

The real product you are selling is certainty: a clear outcome and a clear monthly cost.

Why homeowners lean on finance for heat pumps

Heat pumps are typically a higher upfront purchase than a boiler replacement, even after grants and VAT savings. Many customers can afford the running costs and believe in the long-term benefits, but they hesitate at the lump sum. The sector has also normalised credit: energy suppliers and well-known brands publicly promote low-interest and even 0% options, which signals that finance is a mainstream way to buy. In parallel, customers are used to structured monthly commitments like mortgages and mobile contracts, so a fixed repayment can feel more manageable than draining savings.

A second driver is timing. Customers often want installation before winter, or alongside related upgrades such as solar panels or a home battery, and finance can allow them to proceed without waiting to accumulate funds.

How finance lifts conversions and order value

Offering finance tends to increase sales because it removes the single biggest friction point: affordability at the moment of decision. When a quote is presented as both a total cost and a monthly option, more customers can say yes without compromise, and fewer postpone while they “think about it”. Finance can also protect margin. Instead of discounting to win work, you can present a longer term option that keeps repayments comfortable while preserving your pricing.

It can also increase average order value by making bundles feel achievable. For example, some providers in the market offer the same low APR to cover a full home energy system (heat pump plus solar and battery), and energy suppliers commonly promote longer term loans as part of a broader clean-energy proposition. In practice, finance can shift your sales mix from single-product installs to higher-value packages and service add-ons.

Standout principle: If you do not offer a monthly option, the customer will invent one by delaying.

Typical UK heat pump transaction values

Scenario	Typical total installed price	Grants or incentives that may apply	Customer balance to fund	Notes
Heat pump installation (standard home)	£8,000 to £15,000+	Boiler Upgrade Scheme £7,500 (England and Wales), plus 0% VAT on supply and installation	Often £500 to £7,500+	Final balance depends on property, design and emitter upgrades
Heat pump + complementary works	£12,000 to £20,000+	As above, plus supplier cashback schemes may be available via participating banks	Often £4,000 to £12,500+	Includes items like cylinders, controls and pipework changes
Whole home energy bundle (heat pump + solar + battery)	£15,000 to £30,000+	Incentives vary; some lenders offer low-rate plans covering bundles	Often £7,500 to £22,500+	Higher value, but also easier to justify with monthly budgeting
Post-grant example seen in market	£11,499	£7,500 grant	£3,999	Illustrates how grant stacking can transform affordability

What you can put on finance

Air-source heat pump supply and installation
Ground-source heat pump supply and installation
Hot water cylinder and associated plumbing modifications
Heating controls and smart thermostats
Radiator upgrades, pipework changes and system balancing
Electrical works directly related to the install
Commissioning, handover and customer training
Optional bundles such as solar PV and home battery (where offered)

FCA and compliance: the essentials (without the jargon)

If you introduce customers to finance, you must keep promotions clear, fair and not misleading, and ensure any representative examples are accurate for the product you are advertising. Your role must be explained plainly: whether you are acting as an introducer or a credit broker, and whether you can recommend a lender or simply introduce options. Customers should be told that finance is subject to status and affordability checks, and you must present key information, including APR and term, in a way that matches the advert and the quote.

Introducer and broker models: how they work in practice

Most installers do not want the burden of becoming a lender. Instead, they partner with a regulated finance broker or provider and introduce customers who want to spread payments. In an introducer model, your team captures basic details and passes the customer to the broker or lender journey, where eligibility, underwriting and approval are handled. In a broker model, the broker may search available lenders to find a suitable offer, then the customer completes the application and signs the agreement.

For your business, the operational advantage is speed and clarity: you keep your sales process focused on survey, design and installation, while the finance partner manages credit checks, documentation and regulatory requirements. Many market propositions include fixed-rate terms commonly in the 5 to 10 year range, and you will also see promotional structures such as no upfront deposit options or low APR offers from well-known brands.

A customer journey you can build into your sales process

Qualify early: Ask whether the customer prefers to pay upfront or would like a monthly option.
Frame the funding stack: Explain the impact of 0% VAT and any eligible grants, such as the £7,500 Boiler Upgrade Scheme in England and Wales.
Present two prices: Show the total installed price and an illustrative monthly figure over 5 and 10 years.
Be specific about timing: Clarify whether payments start immediately or after installation, where the lender product supports that.
Share eligibility basics: Confirm finance is subject to status and affordability checks and that terms can vary.
Introduce the application: With consent, move the customer into the broker or lender application journey.
Keep installation planning separate: Continue scheduling, survey and technical sign-off in parallel, so finance does not slow delivery.
Confirm approval and paperwork: Ensure the customer receives and understands the agreement before work proceeds.
Install and hand over: Complete commissioning, provide documentation, and reinforce aftercare.
Follow up: Check satisfaction and invite reviews, referrals and future upgrade conversations.

Next step you can implement this week: Add a “Monthly from” line to your quote template, supported by a compliant representative example provided by your finance partner.

Getting set up with Kandoo

Kandoo is a UK-based retail finance broker, which means we help you offer regulated finance options without you having to become a lender. Once you are onboarded, you can introduce customers who want to spread the cost of their heat pump installation, and we support a streamlined application experience designed for home improvement purchases. The aim is simple: help you convert more enquiries into booked installs by giving customers a sensible way to pay, while keeping your team focused on surveys, specification and quality installation. If you are already using grants and 0% VAT to sharpen your quotes, adding finance completes the affordability story and makes your proposal easier to act on.

FAQs

Q: What APR should customers expect for heat pump finance?

A: It varies by lender, term and customer profile. In the market, you will see low-APR offers around the mid single digits from some brands, as well as longer-term options that can price higher.

Q: Can customers finance the balance after the Boiler Upgrade Scheme grant?

A: Yes. Many customers use the grant to reduce the upfront cost and then finance the remaining balance, which can make monthly payments feel far more manageable.

Q: Do customers need a deposit?

A: Some plans require a deposit, while others advertise no upfront deposit options. Your finance partner can clarify which products are available and how to present them compliantly.

Q: Are 0% deals available?

A: Certain providers in the wider market promote 0% interest options on specific terms, often shorter durations. Availability depends on the lender product and the customer’s eligibility.

Q: Can finance cover solar panels and a home battery as well?

A: Sometimes, yes. Some market offers allow a single plan to cover a broader home energy system, which can increase order value if you supply bundled upgrades.

Q: Do we need FCA authorisation to offer finance?

A: It depends on your role and activities. Many installers work as introducers under an appropriate arrangement, with the regulated broker or lender handling the credit process. Get proper guidance for your exact setup.

Q: Will offering finance slow down our sales process?

A: It should not. A well-designed journey runs alongside survey and scheduling, with approval and documentation handled digitally by the finance partner.

Q: How should we talk about monthly payments in ads and on our website?

A: Use compliant representative examples provided by your finance partner, and make sure key terms like APR, duration and any deposit requirements are clear and consistent.