The government, which has allocated £450m over three years to its Boiler Upgrade Scheme, said the subsidies will make installing a low carbon heat pump a similar cost to installing a traditional gas boiler.

Ministers said the move will help towards the government’s new target for all new heating systems installed in UK homes by 2035 to use either low-carbon technologies, such as electric heat pumps, or to support new technologies like hydrogen-ready boilers.

The scheme is part of a £3.9bn plan to decarbonise heating in households and workplaces.

Prime Minister Boris Johnson said: “As we clean up the way we heat our homes over the next decade, we are backing our brilliant innovators to make clean technology like heat pumps as cheap to buy and run as gas boilers – supporting thousands of green jobs.

“Our new grants will help homeowners make the switch sooner, without costing them extra, so that going green is the better choice when their boiler needs an upgrade.”

Business and Energy Secretary Kwasi Kwarteng said: “Recent volatile global gas prices have highlighted the need to double down on our efforts to reduce Britain’s reliance on fossil fuels and move away from gas boilers over the coming decade to protect consumers in long term.

“As the technology improves and costs plummet over the next decade, we expect low carbon heating systems will become the obvious, affordable choice for consumers. Through our new grant scheme, we will ensure people are able to choose a more efficient alternative in the meantime.”

The Boiler Upgrade Scheme will run alongside other funding packages such as the Social Housing Decarbonisation Fund and Home Upgrade Grant that will help low-income and vulnerable households with the cost of installing low-carbon measures and improving energy efficiency.

Jonny Marshall, senior economist at the Resolution Foundation, a think tank, said: “The Government has rightly made good on its Manifesto commitment of funding to reduce carbon emissions from people’s homes, and to prioritise low-income families and those in social housing for support in making homes more energy efficient.

“The £450m funding to support the roll-out of heat pumps is also a welcome start. The key test is whether it delivers the cost reductions needed to make the transition affordable for everyone, as history shows the risk that higher income families may be more likely to take advantage of such grants.

“The Treasury could have gone further by setting a five- rather than three-year budget for this investment, as it has in the past for capital funding, to provide the market more certainty over its commitment to decarbonise home heating.

“This lack of certainty in the market could really matter, as the 90,000 heat pumps that this new scheme is expected to fund still falls well short of the 450,000 heat pumps the Climate Change Committee says need to be installed by 2025 in order to keep the UK on track to cut emissions from our homes in half by 2035.”