The Department for Energy Security and Net Zero confirmed on 23 October 2023 that the Boiler Upgrade Scheme has been extended by three years, to 2028, and that grants for heat pumps have risen to £7,500. The announcement was made by Energy Security Secretary Claire Coutinho and Lord Callanan, Minister for Energy Efficiency and Green Finance.
Air source heat pump grants rose from £5,000 to £7,500, a 50 per cent increase, and ground source heat pump grants rose from £6,000 to £7,500. Households can still access £5,000 grants for biomass boilers1. The department said the scheme, already a £450 million funding pot, will also receive an allocation from the £6 billion set aside for energy efficiency and clean heat over 2025 to 2028, so the future budget is not fixed1.
"The scheme has also been extended by 3 years to 2028, giving people more time to take advantage of the opportunity."
The department said estimates place the typical cost of buying and installing a gas boiler at between £2,500 and £3,000, and that starting prices for heat pumps can now be below this for some households when the grant and additional supplier discounts are taken into account1. It also said customers do not have to apply for the grants themselves: they agree a quote with an MCS certified installer, who completes the paperwork, after which Ofgem contacts the customer to confirm they wish to proceed1.
| Measure | Grant before | 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 |
Alongside the grant change, the government made £10 million available through the Heat Pump Ready programme for innovation aimed at cutting installation costs, and launched a "Welcome Home to Energy Efficiency" campaign covering measures such as checking loft and wall insulation, upgrading to a heat pump and installing solar panels1. It also said the ban on installing oil and liquefied petroleum gas boilers, and new coal heating, for off-gas-grid homes is being delayed to 2035 instead of phasing them out from 2026, and that an exemption will apply to the phase-out of fossil fuel boilers, including gas, in 2035 so households will not have to switch if their home is not suitable1.
Why it matters for households
The grant level determines how much of a heat pump's upfront cost a household can offset, and the extension to 2028 changes the timescale over which that support can be claimed. The department states that Boiler Upgrade Scheme grants can be used alongside support from the £1 billion Great British Insulation Scheme for more than 300,000 homes in England, Wales and Scotland1, which matters for homes where eligibility depends on the state of the building fabric as well as the heating system. For off-gas-grid homes, the delay to 2035 removes the 2026 deadline that had applied to oil, LPG and coal heating, and the department notes that some such homes are not suitable for heat pumps because they need expensive energy efficiency upgrades, particularly solid wall insulation costing £10,000 to £15,000, or a significantly upgraded electricity connection1. The department says it will consult next year on alternative approaches to decarbonising off-gas-grid homes1. How the scheme interacts with other support is set out in the site's comparison of the Boiler Upgrade Scheme and ECO4.
What happens next
The scheme now runs to 2028. A consultation on alternative approaches to decarbonising off-gas-grid homes is to follow next year, and the government has said it will not propose that any household installs a low carbon option that is not suitable for its home1. Organisations can bid for a share of the latest round of Heat Pump Ready funding1.