What is the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme (BUS) could give you thousands of pounds towards adding low-carbon heating alternatives such as heat pumps to your home.

The BUS is a government scheme designed to help meet the UK’s 2050 net zero emissions target by driving down the cost of low-carbon heating technologies and working with industry to ensure they are no more expensive to buy and run than traditional fossil fuel boilers.

It's designed to help homeowners in England and Wales afford the upfront costs of low-carbon heating.

The rates available for heat pumps increased in October 2023. You can now apply for £7,500 towards the cost of a heat pump.

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How does the Boiler Upgrade Scheme work?

If you want to install an air source heat pump, ground source pump or biomass boiler to replace your traditional heating, you could get thousands of pounds towards the work.

You can't apply directly – your heating system installer, who must be registered with the scheme, will do this for you. Successful applicants receive one-off payments of up to £7,500 towards the cost of the installation project.

The funding is sent as a voucher to installers registered with the scheme. They're valid for a set period to make sure they're used quickly – three months for air source heat pumps or biomass boilers, and six months for ground source heat pumps. 

Upfront checks are carried out before vouchers are issued or grants paid to minimise non-compliance, fraud and gaming of the scheme.

The scheme’s £450m funding is expected to help install 90,000 heat pumps by 2025. But this is far fewer than the target of 600,000 a year, announced in November 2020. 

While the government has stopped short of banning the installation of fossil fuel boilers for now, it’s hoping that cleaner alternatives such as heat pumps will cost the same to buy and run as gas boilers by 2030, and therefore encourage more people to make the switch.

Is a heat pump right for you? Read our guide to choosing the best heating for your home

What's available in Scotland and Northern Ireland?

The Boiler Upgrade Scheme is open to people in England and Wales.

Scotland: 

If you live in Scotland and want to switch to a clean heating system, you can apply for grant funding of up to £7,500, with an additional £7,500 of funding available as an optional interest free loan. 

For energy efficiency measures such as insulation, Scottish grant funding is available up to 75% of the combined cost of measures up to a maximum grant amount of £7,500. The remainder of funding requested can be taken up as an optional interest-free loan up to a maximum funding limit per improvement. An additional £1,500 is available for rural and island homes to both the clean heating and energy efficiency grants, meaning rural households can claim up to £18,000 in grant funding. 

Get more information and apply through Home Energy Scotland.

Northern Ireland: 

For anyone in Northern Ireland, the Boiler Replacement Scheme has now closed. Your best route to funding is to find out what energy saving grants are available in your area. 

Which technologies are eligible for the Boiler Upgrade Scheme?

Grants are currently available for the following technologies. You can get one grant per property.

• Air source heat pumps pull heat from the outside air and compress it to warm it up and heat your home.
• Ground source heat pumps work in a similar way, taking heat from the ground underneath your property. 
• Biomass boilers tend to work by burning wood or wood pellets to deliver heating and hot water to your home.

Read more: How do heat pumps work?  

Who can apply for the Boiler Upgrade Scheme?

You'll need to be a homeowner of an existing home in England and Wales. Private landlords can apply, too.

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

You must have a valid energy performance certificate (EPC) – one that's less than ten years old – for the property.

Biomass boilers can only get BUS grants in rural areas (based on the Office for National Statistics’ definition) with no connection to the gas grid, or when they are replacing existing fossil fuel systems that are not fuelled by mains gas or direct electric systems.

Heat pumps aren't suitable for all homes. They must be installed outside and require space indoors for a hot-water cylinder. 

Heat pumps work best in homes that are already energy efficient, so anyone living in a poorly insulated property may face bigger bills or colder rooms. 

The grant can only be used to install a heat pump that can meet the heating and hot-water 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.

If you can’t install the recommended insulation because your property is listed, is in a conservation area or is otherwise exempt, you may still be able to apply, but you will have to provide evidence of exemption. New-build properties are also not eligible unless you are a self-builder.

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How do you apply for the Boiler Upgrade Scheme?

If you decide the BUS is right for you, you can apply through the heating system installer you’ve chosen to do the work.   

The installer must be registered with the scheme and will apply on your behalf to Ofgem, which is administering the scheme for the government’s Department for Energy Security and Net Zero (DESNZ).

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

There are several stages in the application process: 

• Find a Microgeneration Certification Scheme (MCS) certified installer who can carry out the work, as only MCS certified installers can apply. The MCS 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. 
• The installer assesses the property and confirms that the installation is eligible for a grant. 
• Agree a quote for the installation.
• The installer applies for the grant on your behalf. You must give permission for the installer to pass on your details. 
• Ofgem contacts 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. 
• Your installer should deduct the value of the grant from the total cost payable by you. 
• Once your new heating system is installed, the installer will commission the system and redeem the voucher to receive the grant. 

Make small changes to help the planet: The latest eco advice from Which?

How much funding do you get through the Boiler Upgrade Scheme?

Funding is available for both air source and ground source heat pumps, as well as biomass boilers. 

You can apply for: 

• £7,500 off the cost of buying and installing an air source heat pump 
• £7,500 off the cost of buying and installing a ground source heat pump 
• £5,000 off the cost of buying and installing a biomass boiler 

These rates for heat pumps increased on 23 October 2023. If you applied before this date and your installer hasn't fitted your heat pump yet, ask your installer about cancelling your grant and reapplying for the higher amount.

The grant is not expected to cover the full cost of replacing your existing boiler with a low-carbon alternative, however, so the process could still cost more than installing a new gas boiler. The typical cost of an air source heat pump is around £14,000, according to estimates by the Energy Saving Trust, meaning a £7,500 grant could cut the cost in half.

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

What's the difference between the Boiler Upgrade Scheme and Renewable Heat Incentive?

The BUS has replaced the Domestic Renewable Heat Incentive (RHI), which closed to new applicants on 31 March 2022. 

The RHI offered tariff payments over seven years to financially reward people who use renewable energy to heat their homes, whereas the BUS is an upfront payment to help with installation costs. 

The BUS gives up to £7,500 upfront, whereas the RHI paid around £7,000 over seven years in quarterly instalments.

Read our guide to buying a new boiler to find out about the types of boilers to choose the best one for your household

Is the Boiler Upgrade Scheme worth it?

The cost of a ground source heat pump depends on the size of the system. You'll also need to factor in the cost of fitting internal heating systems, like underfloor heating, if your property requires it. 

Cost also varies according to the size of the heat pump, the complexity of the system and whether you choose simple or advanced controls (such as a weather-compensated thermostat). 

You'll also need to allow for the cost of upgrading your radiators or installing underfloor heating for an air-to-water heat pump, which can cost several thousand pounds. Your home might also need extra insulation.

There is 0% VAT on the installation of energy saving materials – including heat pumps and biomass boilers – for the next five years, which will help reduce the cost.

You’ll need to decide whether your costs to install a renewable energy option in your home will be outweighed by your potential energy bill reduction and an uplift in your green credentials.

You're most likely to benefit from the BUS if your home is off the gas grid and you replace your current heating system with a renewable one. This is because off-gas-grid homes are usually more expensive to heat, so there's more potential to save on fuel bills. You can still install renewable heating and apply for the initiative if your home is connected to the gas grid, though.

Make sure that renewable heating is suitable for your home before you start. Read our guides to ensuring your home is well insulated.

Find out about other government energy grants available for your home.