New Boiler Upgrade Scheme provides funding to replace boilers with heat pumps – £7,500 grants available

Have you been thinking about taking the plunge and upgrading your boiler to a heat pump? Maybe you have heard about the Government’s plans to phase out gas boilers?

Whatever your circumstances, if you are looking to replace your boiler with something more energy-efficient a heat pump grant from the new Boiler Upgrade Scheme could make the switch much easier on your wallet.

This Government grant scheme will help you to get ahead of the curve and upgrade your boiler before gas boilers are banned completely.

It offer grants for property owners who install heat pumps (and in some cases biomass boilers). It started in April 2022 and from October 2023 the grant amount was increased to £7500 per property. The grants provide funding to install an Air Source Heat Pump or a Ground Source Heat Pump. Owners with solid fuel heating can also get a grant towards a biomass boiler.

Boiler Upgrade Scheme

1. What is the Boiler Upgrade Scheme (BUS)?

The Boiler Upgrade Scheme (BUS) is a Government grant scheme for heat pumps. It provides funding for homeowners to install home heat pumps in their homes at a discounted price. In some limited circumstances, the grant scheme could also provide funding to install biomass boilers but only when replacing fossil fuel heating.

This Government grant scheme  opened for applications in April 2022 and it aims to incentivise people to switch to cleaner heating and help the UK to reach its carbon reduction targets.

These grants could help you to install Air Source Heat Pumps or Ground Source Heat Pumps at a fraction of the price. So, if you are thinking about ditching your gas-guzzling boiler or if you’d like to escape the looming gas price hikes these grants could be for you.

2. Who is eligible for Boiler Upgrade Scheme grants?

Boiler Upgrade Scheme grants are available in England and Wales and homeowners and businesses can apply for these grants. An alternate scheme is yet to be announced for Scotland.

Homeowners and businesses can get these grants towards the installation of heat pumps and unlike other energy-efficiency grant schemes such as the Energy Company Obligation, there are no requirements to claim benefits or meet income rules.

However, the property will need to be suitable for a heat pump and it is worth considering the benefits of heat pumps to determine whether they are suitable for your home or business.

3. What grants can you get in the Boiler Upgrade Scheme?

The scheme provides funding for the installation of heat pumps.

  • Air Source Heat Pump Grants are worth £7,500
  • Ground Source Heat Pump Grants are worth £7,500

The heat pump has to be installed by an MCS approved installer. The heat pump installed will need to have a capacity of 45kW or less to be eligible for the scheme. These amounts were increased on 23 October 2023.

4. What properties are eligible for the Boiler Upgrade Scheme?

Your property will need to be located in England or Wales as Scotland isn’t included in this scheme. As with previous grant schemes, such as the Green Homes Grant scheme and Energy Company Obligation, there will be a requirement for basic energy-efficiency measures to be fitted before the heat pump installation. This means that if you have cavity walls they must be filled, and you need a minimum depth of insulation in your loft. To evidence this, you will need to have an up-to-date Energy Performance Certificate (“EPC”) which does not show these measures as being required.

5. Can I have a Hybrid system or a ‘heating only’ heat pump?

To be eligible for the Boiler Upgrade Scheme Grant, the heat pump must provide both heating and hot water to the property. This means that heat pumps for home heating only aren’t eligible unless they provide hot water too.

The following circumstances will NOT qualify for a grant:

The heat pump installed under the grant scheme must provide both heating and hot water to the property.

The heat pump must provide both heating and hot water to the property to be eligible.

If you don't know the energy 'load' for your property you can look it up on the EPC Register or Scottish EPC Register.

6. How Do I Get a Boiler Upgrade Scheme grant?

The entire Boiler Upgrade Scheme grant process is led by MCS accredited installers. So, you need to find a trustworthy and reliable installer of heat pumps in your area. The installer will apply for and administer the grant on your behalf. And if you don’t know a great installer we can help as we work with a network of the best MCS accredited installers.

The process for getting a grant is as follows:

  1. Complete a short application form and provide some information about your property.
  2. Your application will be allocated to an MCS accredited installer in your area.
  3. The installer will assess the application and produce an outline quotation for the installation.
  4. Once you accept the quotation, the installer will apply to Ofgem for your Boiler Upgrade Scheme grant voucher.
  5. The installer will arrange installation at a time and day of your choosing (you will need to pay the installer any contributions before the installation takes place).

Once the project is finished, the installer will redeem their voucher and they are paid the grant directly by Ofgem.

7. Frequently Asked Questions

The Boiler Upgrade Scheme started in April 2022. It is available in England and Wales. The scheme provides air source heat pump grants and ground source heat pump grants of £7,500. It is a one-off payment for the upfront costs of installing air source heat pumps or ground source heat pumps.

The Boiler Upgrade Scheme is a government grant which provides grants of £7,500 for air source heat pumps or ground source heat pumps to be installed. It is administered by Ofgem and provides grants for alternatives to conventional boilers that are used in the majority of homes in the UK. The grants pay towards the installation of air source heat pumps and ground source heat pumps and the pumps have to be installed by an MSC accredited installer.

The Energy Saving Trust quote typical costs for installing heat source pumps in the UK as £7,000 to £13,000. The range is quite broad because heat pumps can be installed in a range of ways and the size of your home and type of home will affect cost. New build homes for example will be cheaper. Costs will also depend on the model, brand and size of the heat pump installed.

Currently, gas boilers are responsible for supplying hot water and heating to the majority of homes in the UK. The government has set a target that by 2030 these gas boilers will be replaced by modern alternatives such as heat pumps, solar thermal or electric heating. This is part of an ambitious plan to reduce greenhouse gas emissions.

The main alternatives to gas boilers are as follows:

Air Source Heat Pumps

Air source heat pumps extract air from the outside and use it to deliver heating and hot water. Air to water heat pumps works with wet central heating systems such as radiators and underfloor heating.

Biomass Boilers

Biomass boilers burn biomass fuel such as wood logs, chips or pellets (only plant-based organisms rather than fossil fuels).

Electric Boilers

Electric boilers are run exclusively with electricity as their fuel but unfortunately, they are generally unable to meet high demands for heating and hot water so often used in smaller homes and flats.

Ground Source Heat Pumps

Ground source heat pumps extract air from the ground and use it to deliver heating and hot water. A pipe network is installed underground and refrigerant circulates in the pipes, warms and is then pumped before circulating through a central heating system. Hot water can be generated through an immersion heater and hot water cylinder.

Hybrid Heating Systems (these combine a gas boiler and a heat pump)

A hybrid heating system combines a traditional gas boiler with a heat pump and can automatically switch between the two systems providing the most energy-efficient experience with the familiarity of a traditional boiler.

Infrared Heating

Infrared isn’t considered to be a wet heating system (wet refers to water and radiators) but instead, they warm the people and the objects in the room rather than the space.

Solar-powered Electric Heating 

Electric heating systems such as electric boilers, electric storage heaters, infrared heating or immersion heaters are powered by solar panels.

Solar Thermal Panels

During the day, solar panels absorb heat from the sun and that energy is used to heat wet central heating systems and/or hot water cylinders.

The £7,500 heat pump grants pay towards the cost of installing an air source heat pump. The grant is paid to the installer rather than the applicant and the installer applies for the grant money once they have successfully installed the heat pump. Only MCS accredited installers can install heat pumps under the scheme and they need to follow Ofgem’s rules (Ofgem administer the scheme). Once the heat pump has been installed the MCS accredited installer will issue an MCS certificate.

The RHI (Renewable Heat Incentive) finished for new applications at the end of March 2022. From April 2022 the Boiler Upgrade Scheme (BUS) for heat pump grants replaced RHI and pays for money upfront towards the cost of installing a heat pump. The grant is now worth £7,500 for air source heat pumps or ground source heat pumps is paid directly to the installer after they have installed the heat pump. Whereas the RHI provided money back over a seven-year period.

Assuming an installation cost of £10,000 under RHI you would pay £10,000 upfront and then receive quarterly payments for seven years based on the amount of renewable heat produced by the system. Whereas under BUS you would only pay £2,500 upfront and the other £7,500 would be funded by the grant but there are no ongoing payments.

The Boiler Upgrade Grant Scheme is a great opportunity for homeowners to save money on upgrading their homes and upgrade from their old inefficient boiler. So, if you are looking to get rid of hefty energy bills now could be a great time to make the switch to energy-efficient heating.

At Energy Saving Genie we have a network of over 30 trusted installers with direct access to funding. So rather than searching through installers individually and spending time separating the good from the bad instead you can be connected with the best installers in your area without all the fuss and time involved in searching yourself.