The Department for Energy Security and Net Zero issued a change notice on Thursday 21 September 2023 to increase the Boiler Upgrade Scheme grant level for air source heat pumps (ASHPs) and ground source heat pumps (GSHPs)1. Ofgem, which administers the scheme, set out the new levels in its property owner guidance published on 25 September 20231.
From Monday 23 October 2023, grants of £7,500 are available for ASHPs and GSHPs, while grants of £5,000 remain available for biomass boilers1. Voucher applications submitted before 23 October 2023 are eligible for the original grant level1.
The change raises the ASHP grant by £2,500 and the GSHP grant by £1,500 against the levels that had applied since the publication of guidance v1.1 in July 20221:
| Technology | Grant before 23 October 2023 | Grant from 23 October 2023 |
|---|---|---|
| Air source heat pump | £5,000 | £7,500 |
| Ground source heat pump | £6,000 | £7,500 |
| Biomass boiler | £5,000 | £5,000 |
The grant value does not change with the cost or size of the installation1. The scheme has a committed budget of £450 million over three years from 2022 to 2025, with an annual allocation of £150 million1. Ofgem administers the scheme on behalf of the Gas and Electricity Markets Authority under The Boiler Upgrade Scheme (England and Wales) Regulations 20221.
"On Thursday 21 September 2023, the Department for Energy Security and Net Zero issued a change notice to increase the BUS grant level for ASHPs and GSHPs."
The scheme is installer-led, with applications made by installers on the property owner's behalf1. Properties must be in England or Wales, and both domestic and non-domestic buildings are eligible1. Heating systems must have been commissioned on or after 1 April 2022, and the previous system must have been a fossil fuel system or an electric system that did not include a heat pump1. Installations cannot be funded by more than one source of public funds1. The eligibility rules also require an EPC with no recommendations to install loft or cavity wall insulation, or an exemption1. ASHP systems must be hydronic (air-to-water); air-to-air systems are not eligible1. There is a 45 kWth total capacity limit1.
Why it matters for households
The grant is paid upfront towards the capital cost of an installation, so a higher level reduces the amount a household needs to find from other sources for the same system. For a home weighing up a heat pump against a fossil fuel boiler, the gap between the two narrows. The grant is fixed regardless of installation cost or property size, so the share of the total bill it covers varies by home. The zero rate of VAT on installing energy-saving materials, including heat pumps and biomass boilers, applies between 1 April 2022 and 31 March 20271. Households with a gas boiler should check the gas boiler eligibility rules, and those comparing support routes can look at BUS or ECO4. The grant amount page sets out the current levels.
What happens next
Ofgem states it will not issue BUS vouchers after 31 December 2024, and the latest date a voucher will expire is therefore 31 March 20251. No further changes to grant levels have been reported.
Sources1 cited
- BUS Property owner guidance, ofgem.gov.uk