The Boiler Upgrade Scheme (BUS) opened to grant applications on 23 May 2022, administered by Ofgem on behalf of government1. Installers had been able to open accounts since 11 April 2022, and systems commissioned on or after 1 April 2022 are eligible for support3.
The scheme offers £5,000 towards the cost and installation of an air source heat pump, £6,000 towards a ground source heat pump, and £5,000 towards a biomass boiler1. Biomass support is limited to properties in rural areas that are not connected to the gas grid; heat pumps carry no such restriction2.
| Measure | Grant |
|---|---|
| Air source heat pump | £5,000 |
| Ground source heat pump | £6,000 |
| Biomass boiler (rural, off gas grid) | £5,000 |
The scheme has a committed budget of £450 million over three years from 2022 to 2025, with an annual allocation of £150 million1. Ofgem states it should support up to 90,000 installations by March 2025 and generate £660 million of social benefits2. The grants sit alongside a 0% rate of VAT on the installation of heat pumps and biomass boilers for five years1.
The application process is installer led, with installers applying on behalf of property owners and the grant taken off the quote; property owners must also complete an online form and consent to the application1. Installers must be certified by the Microgeneration Certification Scheme1. Eligibility requires a property in England or Wales with a valid energy performance certificate and no outstanding recommendations for loft or cavity wall insulation, and the installation must fully replace an existing fossil fuel or electric heating system5. New-build homes and social housing are not eligible, though self-build properties are5.
"The Boiler Upgrade Scheme opened to applications on 23 May 2022."
The scheme replaced support previously delivered through the Domestic Renewable Heat Incentive, which closed to new applicants on 31 March 2022 after accrediting 110,281 installations and paying £819.3 million3. Ofgem's first annual report on the BUS, covering the period to 31 March 2023, recorded 15,768 stage 1 applications, 11,998 vouchers issued worth almost £69.1 million, and 9,983 grant payments worth almost £50.2 million7. Of grants paid, 96.3% were for air source heat pumps, and gas boilers were the most commonly replaced system at 46.3%7.
Why it matters for households
For a household weighing up a replacement for a gas, oil or electric heating system, the grant reduces the upfront cost of a heat pump, with the discount applied to the installer's quote rather than paid afterwards1. The scheme is one of the few routes to public money for a domestic heat pump following the closure of the Domestic Renewable Heat Incentive, which had paid quarterly support over seven years rather than a single upfront sum3.
The eligibility conditions tie the grant to the state of the property as well as the technology. A valid energy performance certificate with no outstanding loft or cavity wall insulation recommendations is required, which links the grant to the fabric of the home rather than the heating system alone5. Homes off the gas grid have the additional biomass option, but only in rural locations2.
The government has stated an aim that heat pumps should be no more expensive to buy and run than fossil fuel boilers by 2030, and that by 2035 all new heating systems installed in UK homes will be low-carbon or support technologies such as hydrogen-ready boilers1. Ofgem reports that heat pump technology currently offers a carbon saving of up to 65% compared with a gas boiler2.
What happens next
The scheme runs in England and Wales until 20252. Ofgem has published guidance for installers and property owners and continues to report on scheme activity2. The government has said no one will be forced to remove an existing boiler1.
Sources7 cited
- Ditching costly gas and oil is cheaper thanks to heat pump scheme - GOV.UK, gov.uk
- Boiler Upgrade Scheme Launch | Ofgem, ofgem.gov.uk
- Domestic Renewable Heat Incentive closes: What's next for clean heat? | Ofgem, ofgem.gov.uk
- Decision on administration of Boiler Upgrade Scheme (BUS) | Ofgem, ofgem.gov.uk
- The Boiler Upgrade Scheme leaflet, assets.publishing.service.gov.uk
- Domestic RHI Annual Report 2021-2022, ofgem.gov.uk
- Boiler Upgrade Scheme (BUS) Annual Report - 2022-23 | Ofgem, ofgem.gov.uk