The government has extended the Boiler Upgrade Scheme (BUS) until 2028, three years beyond its original end date of 2025, with additional funding for each of the years following 20251. The extension was announced in the March 2023 Powering Up Britain publications and confirmed in an August 2023 consultation on amendments to the scheme's regulations1. The Department for Energy Security and Net Zero said the budget for the extended years has not been set2.
The scheme, which provides grants towards the cost of replacing fossil fuel heating with heat pumps and, in limited circumstances, biomass boilers, was launched in May 2022 with a budget of £450m1. It covers homes and small non-domestic buildings in England and Wales1. Grants are currently £5,000 for an air source heat pump and £6,000 for a ground source heat pump, with £5,000 for biomass boilers1. One distributor's account of the scheme states the air source and ground source grant is £7,5002; this figure is not given in the government consultation, which describes grants of up to £6,0001.
"We want to make it as cheap to buy and run a heat pump as a gas boiler by extending the Boiler Upgrade Scheme by three years until 2028."
"We have not yet set a budget level for the extended scheme as we want to see how much demand grows in the short term and any decision on funding will be subject to future Spending Review decisions."
By the time of the consultation, the scheme had delivered £65 million in grants, with 1,098 installers registered1. Analysis by the innovation charity Nesta, published in April 2023, found the scheme had prevented the release of over 17,000 tonnes of carbon emissions in its first full year, equivalent to the emissions from over 55,000 people flying from London to New York3. Nesta also found that 53% of the maximum number of vouchers available had been applied for by the end of March 2023, and that around three in five applications received had translated to redemptions paid3. Demand was highest in rural areas, with two of the top three constituencies for applications in Cornwall and South Cambridgeshire the second-highest3.
The consultation, which closed on 12 October 2023, also sought views on differentiating grant levels in different circumstances, retaining or amending Energy Performance Certificate requirements, and whether biomass boilers with a cooking function should be eligible1. It did not consult on the extension itself or on consumer protection work, with further detail promised in due course1.
Why it matters for households
The extension gives households in England and Wales a longer window in which a heat pump installation may qualify for a grant, rather than the scheme closing in 2025 as originally planned1. Because the budget for the years after 2025 has not been set, the level of support available in those years is not yet known2. The scheme is installer-led: an MCS registered installer applies for a voucher on a household's behalf and claims the rebate at the end of the works3. Eligibility rules described by one distributor include that the heat pump must replace an oil, gas or other fossil fuel or electric heating system, must provide a complete heating and hot water solution, must be 45kW or below, and that cavity wall and minimum loft insulation must be completed first2. Hybrid systems with a back-up boiler, heating-only heat pumps and installations covering only part of the load on the EPC are described as not eligible2. The government has an ambition to phase out all new and replacement natural gas boilers by 2035 and to reach 600,000 heat pump installations a year by 20282.
What happens next
The consultation on amendments to the Boiler Upgrade Scheme regulations closed on 12 October 20231. The government said it will provide further details of the extended scheme in due course, and that any decision on funding will be subject to future Spending Review decisions2. No date has been reported for the publication of the consultation response or for the setting of the extended scheme's budget.
Sources3 cited
- Boiler Upgrade Scheme Regulations: consultation, assets.publishing.service.gov.uk
- Boiler Upgrade Scheme: The Extension, Eligibility and How to Apply, altoenergy.co.uk
- Boiler Upgrade Scheme saves 17,000 tonnes of carbon emissions in first year, new analysis finds | Nesta, nesta.org.uk