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Updated: 14 Apr 2022

How the new boiler upgrade grant could help you go green

Households can get up to £6,000 to install a new heating system: are you eligible and is it worth applying?
Family using laptop to switch energy supplier

The Boiler Upgrade Scheme (BUS) is a new government grant that will pay up to £6,000 to households in England and Wales to install a low carbon heating system.

The grant is intended to help property owners overcome the high upfront cost of low carbon heating technologies, such as heat pumps and, in limited circumstances, biomass boilers, which are typically more expensive than traditional gas or oil boilers.

It was officially launched on 1 April 2022, but installers can only start opening accounts today - 11 April, while homeowners won't be able to apply for funding until 23 May.

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How much will you receive?

Grants are available for both air source and ground source heat pumps, and biomass boilers. You can apply for:

The grant is not expected to cover the full cost of replacing your existing boiler with a low carbon alternative, so the process could still cost more than installing a new gas boiler.

According to the Energy Saving Trust (EST), the typical cost of an air source heat pump is between £7,000 to £13,000, so a £5,000 grant couldcut the cost to around £2,000 to £8,000. However, unless your home is reasonably energy efficient already, you may need to add on the cost of additional work to upgrade radiators or pipework, or to install insulation.

Find out how much you could save on your energy bills in our guide to air source heat pump costs and savings.

Read more: types of heat pump explained

Who is eligible for the BUS grant?

Grants are available to owners of existing homes in England and Wales, including private landlords. New build properties are not eligible unless you are a self-builder, building your own home.

The grant can only be used for replacing fossil fuel heating systems, such as gas, oil, or direct electric heating, not for replacing existing low carbon systems.

You must have a valid energy performance certificate (EPC) for the property (i.e., one that is less than ten years old), and it must have no outstanding recommendations for loft or cavity wall insulation. If your EPC does recommend either of these, you must carry out the recommendation(s) and obtain a new EPC before you can apply for a BUS grant.

If you can't install the recommended insulation because your property is listed, in a conservation area, or is otherwise exempt, you may still be able to apply, but you will have to provide evidence of exemption.

Air source heat pump

The grant can only be used to install a heat pump that is capable of meeting the full space heating and hot water heating demands of the property. It must have a capacity of no more than 45 kWth (kilowatt thermal) and a seasonal coefficient of performance (SCOP) of at least 2.8.

Read more:how ground source heat pumps work and air source heat pumps explained

To minimise any impacts on air quality, biomass boilers will be eligible only in rural properties not connected to the gas grid. Grants are not available to install biomass boilers in properties that are in an urban area, or fuelled by mains gas. An 'urban area' is defined as one with a population of 10,000 people or more, and classified as urban by the Office for National Statistics.

How to apply

The scheme is being administered by Ofgem on behalf of the government. As the homeowner, you will not be able to apply for the grant directly, but must first find an installer who will apply to Ofgem on your behalf.

As with all home improvements, we recommend getting a quote from more than one installer before agreeing to any work.

MSC logo cropped
There are a number of stages in the application process:

You'll need to find an MCS certified installer who is able to carry out the work, as only MCS certified installers can apply for the BUS grant. The MCS (Microgeneration Certification Scheme) is a nationally recognised standards organisation that assures the competence of installers and quality of products. You can find a local MCS certified installer here.

  1. The installer will assess the property and confirm that the installation is eligible for a grant.
  2. Agree a quote for the installation.
  3. The installer will apply for the grant on your behalf. You must give permission for the installer to pass on your details.
  4. Ofgem will contact you to check the validity of the application. You must confirm to Ofgem that the installer is acting on your behalf and that you are happy to proceed with the application.
  5. Your installer should deduct the value of the grant from the total cost payable by you.
  6. Once your new heating system is installed, the installer will commission the system and redeem the voucher to receive the grant.

This process means that homeowners will not need to make the application themselves, and will neither receive nor redeem the voucher. The value of the grant will be deducted from the installer's bill, so the upfront cost of the installation is lower. The installer will receive the grant payment directly, following installation and commissioning of the heating system.

When does the Boiler Upgrade Scheme open for applications?

Any eligible heating system commissioned from 1 April 2022 onwards can receive a BUS grant. However, the voucher application system opens from 23 May 2022.

The scheme is scheduled to run for three years, from 1 April 2022 to 31 March 2025, with a total budget of £450m. At £5,000 each, that's enough for 90,000 installations in total, or just 30,000 homes a year, so the money is likely to run out quickly.

If a heat pump or biomass boiler looks like a good option for you, find an MCS certified installer and begin the process as early as possible for the best chance of receiving a grant.