Scottish Government confirms new grant support to help more households connect to district heating
News Update
18 November 2025
The Scottish Government has announced increased financial support for households wishing to connect to the Lerwick district heating network. The update was delivered by First Minister John Swinney in a statement to the Scottish Parliament and follows his visit to Shetland earlier this year.
From next month, homeowners will be able to apply for up to £7,500 in grant funding towards a district heating connection through the Home Energy Scotland Grant and Loan Scheme. An optional interest free loan of up to £7,500 remains available. Households that qualify for the rural and island uplift will also receive a further £1,500 of grant support. This means eligible customers in Shetland can benefit from up to £9,000 of grant funding in total.
Shetland Heat Energy and Power (SHEAP) welcomes the announcement. The Lerwick heat network currently supplies low carbon heat to more than 1,250 homes and businesses and this enhanced level of support will make it easier for more households to join the scheme.
Speaking on Radio Shetland, the First Minister said that the challenges and opportunities facing the local heat network had been made clear to him during his visit. He commented that he had been enlightened by the presentation delivered at the SHEAP offices and recognised the strong potential for more homes to connect with the right financial support in place.
The government has also highlighted the wider importance of heat networks in rural and island areas which are not served by the gas grid. District heating provides an established and lower carbon alternative and plays a valuable role in reducing fuel poverty and supporting the transition to cleaner heat.
The new funding support will be available from next month through Home Energy Scotland. Once the scheme formally opens, SHEAP will publish guidance for prospective customers on connection processes and technical requirements.
Anyone interested in joining the district heating network should contact Home Energy Scotland in the first instance for advice on grant eligibility, the application process and available support. SHEAP will continue to assist customers with technical and connection queries once applications are in progress.