Homeowners in England and Wales will be offered subsidies of £5,000 from next April to help them to replace old gas boilers with low carbon heat pumps.
The grants are part of the government's £3.9 billion plan to reduce carbon emissions caused by heating homes and other buildings.
It is hoped no new gas boilers will be sold after 2035. The funding also aims to make social housing and public buildings more energy efficient.
However, experts have stated that the budget is too low and the strategy not ambitious enough. Ministers say the subsidises will make heat pumps a comparable price to a new gas boiler, but the £450 million being allocated for the subsidies over three years will cover a maximum of just 90,000 pumps.
Matthew Fell, Chief Policy Director at the Confederation of British Industry (CBI), said: '£5,000 heat pump grants will help get the ball rolling when it comes to decarbonising homes across the UK. The government's Heat and Buildings Strategy provides a golden opportunity for both the public and private sector to pick up the pace of progress to net zero.
'There's no doubt that the scale of the challenge is considerable. These welcome measures – including the 2035 phase out of new gas boilers – will help consumers and business better prepare to change the way they heat their homes and buildings.'