The government said new £5,000 grants will be available to households to help them to install low-carbon technologies from next April.
The plans aim to make heat pumps — which run on electricity and work like a fridge in reverse to extract energy from the air or ground — no more expensive to install than a traditional boiler.
But environmentalists have criticised the three-year scheme - which would pay for one in 250 boilers to be replaced - as not going far enough.
Out of the 22 million gas-heated households in the UK, 90,000 would be able to benefit from £5,000 grants under the £450m plan.
While the new incentives aim to make the UK’s homes greener, the government has said homeowners will not be forced to make the low-carbon switch when replacing existing boilers.
But for those who want to choose a more environmentally friendly option, the grant will be available to cut the installation costs — which is around £10,000 on average for heat pumps.
Instead of forcing people into making an immediate switch, the grants aim to encourage homeowners to make green choices when the time comes to replace old boilers.
Octopus Energy, a renewable energy group, said it would install heat pumps for about the same cost as gas boilders when the grant scheme launches next spring.
The government’s boiler upgrade scheme - worth £450m in total - is planned to run over three years until 2024.
The government says it wants to see households “gradually move away” from fossil fuel boilers “in an affordable, practical and fair way” over the next 14 years.
But speaking about the boiler upgrade scheme, Mike Childs from Friends of the Eart said: “£450m pounds delivered via individual £5,000 grants means 90,000 heat pump installations over three years.
“That just isn’t very much, and won’t meet the prime minister’s ambition of 600,000 a year by 2028.”