To mitigate health and environmental effects from coal-based home heating, the Beijing Municipality has implemented a programme in 3,700 villages that subsidizes electric heat pumps and electricity, and bans coal. Here, we estimate this programme’s impact on household energy use and expenditure, well-being and indoor environmental quality by comparing treated and untreated villages in three districts that vary in socioeconomic conditions. We find that, under this programme, households in high- and middle-income districts eliminated coal use with benefits to indoor temperature, indoor air pollution and life satisfaction. In a low-income district, the policy had partial effectiveness: coal use was contingent on household wealth, and there were fewer benefits to the indoor environment and negative impacts on well-being. These results suggest that a rapid household energy transition can be effective, but it is essential to appropriately control subsidies and fine-tune supports to limit transitional hardships for the less affluent. The Beijing Municipality has implemented a programme that subsidizes electric heat pumps and electricity, and bans coal. This study estimates the programme’s impact on household energy use and expenditure, well-being and indoor environment quality.