As part of the Boiler Upgrade Scheme (BUS), grants of up to £7,500 towards heat pump system installation are available to eligible homes in England and Wales. The government has set aside £450 million for this scheme and it operates on a first-come, first-served basis for those who meet the eligibility criteria.
On average about 90,000 homes are expected to benefit from the energy efficiency measures funded by the scheme. BUS funding is due to run until the end of March 2028 and is intended to encourage property owners to replace their old traditional fossil fuel boilers with low carbon heating systems including heat pumps, and in some cases, biomass boilers.
Eligible applicants could receive one of the following under the Boiler Upgrade Scheme:
£7,500 off the cost and installation of an air source heat pump
£7,500 off the cost and installation of a ground source heat pump
£5,000 off the cost and installation of a biomass boiler
What heating systems will be covered by the grant?
Heat pump installations
The types of heat pumps (high and low-temperature units) covered by the Boiler Upgrade Scheme include.
- Ground source heat pumps
- Air source heat pumps
- Water source heat pumps
Qualifying households need to have a heat pump capacity lower than or equal to 45kWth, restricting the support to smaller installations to ensure as many households as possible can be helped by the scheme. Shared ground loop arrays are permitted, subject to a “total system capacity” limit of 300kWth.
Grants of up to £7,500 are available for both air source heat pumps and ground source heat pumps under the BUS scheme.
Biomass installations
There are a few situations where homes are deemed not suitable for heat pumps, in which case a £5,000 grant could cover a biomass installation. However, this is only when it is completely necessary and only in rural areas. Both the government and the Committee on Climate Change (CCC) state that heat pumps offer the most potential for heat decarbonisation.
Biomass boilers generate heating and hot water through the burning of organic materials like wood chips, wood pellets, logs and other plant matter, usually drawn from renewable sources. This makes them a greener alternative to the fossil fuels used in the current heating system that the majority of households are likely to have.
What systems won’t be covered by BUS?
There will be help available to installations offering space and water heating in buildings, but the scheme does not include:
- Process heating
- Biogas combustion
- Hybrid (bivalent) heat pump systems
- Heat networks with a “total system capacity” of more than 45KW
- Solar thermal
However, solar thermal systems can be fitted as part of a heat pump system funded by the scheme, providing the heating system can meet the complete space and water heating requirements.
Who is the Boiler Upgrade Scheme for?
Eligibility criteria
BUS is aimed at households and small non-domestic properties in England and Wales. The flat-rate grant is designed to aid with the cost of fitting heat pumps to provide heating and hot water to a property, replacing existing fossil fuel heating systems like oil, gas, or direct electric. The heat pumps need to have a minimum SCOP of 2.8.
All applicants need to have a valid Energy Performance Certificate (EPC), provided within the last 10 years. If a home has an EPC or insulation exemption, for instance, if it is a listed building, it might be eligible. You will still be able to apply if you currently lack or have limited loft or cavity wall insulation, but you need to have a commitment to improving this in order to qualify for BUS.
Custom and self-build homes will qualify for BUS, as eco-friendly building regulations will need to have been complied with. This means that custom and self-builders will not have to provide an EPC as evidence for insulation eligibility.
Who is not eligible for BUS?
The scheme is not available in Northern Ireland and Scotland. There are separate funding schemes running such as Home Energy Scotland offering interest-free loans or grants to make homes more energy efficient. The Boiler Replacement Scheme in Norther Ireland is closed, but there may be some energy saving grants available.
Anyone replacing an existing low-carbon heating system will not qualify for BUS funding. Also, the scheme is not open to anyone in social housing and new-build homes.
What are the key details of BUS?
Timeline
Any heat pump systems to be commissioned to replace an existing fossil fuel system will be entitled to apply for funding. However, where a system has been commissioned prior to making an application for funding, this should have been more than 120 days ahead of the application or it will not be eligible for funding.
Application process
Customers that are interested in applying for BUS should register their interest with MCS-certified heat pump installers, they will then agree on a quote for the fitting of the new system and apply for the grant on their behalf. Ofgem provides grant vouchers based on availability and if all aspects of the criteria are met. Any outstanding recommendations for loft or cavity wall insulation have to be finished before the voucher for funding can be redeemed.
Voucher redemption
The voucher for funding through BUS will be valid for six months, during which time the installation must be completed, and the heat pump commissioned by the verified installer. If the voucher expires, the application can be started again, but allocations for vouchers are made on a first-come, first-served basis, meaning you could miss out.
The benefit of the grant is that it is designed to offset the bulk of the cost of installing a new heat pump. In some circumstances, householders may be required to pay the remainder of the costs not covered by the grant itself. Redeeming the voucher will be done by the certified installer, who will confirm proof of the installation and process the paperwork when finished.
To check your eligibility for a heat pump grant to replace your old gas boiler or other fossil fuel heating system click here.
