The Boiler Upgrade Scheme (BUS) will run until 2028 rather than ending in 2025, and grants for heat pumps rose to £7,500 from 23 October 2023, the Department for Energy Security and Net Zero said1. The scheme had previously offered £5,000 for air source heat pumps and £6,000 for ground source models1.
The increase is 50 per cent for air source models, which the department described as making the scheme one of the most generous in Europe1. Biomass boiler grants remain at £5,0001. 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 could now fall below this for some households when the grant and supplier discounts are taken into account1.
"The scheme has also been extended by 3 years to 2028, giving people more time to take advantage of the opportunity."
The same announcement confirmed that the ban on installing oil and liquefied petroleum gas boilers, and new coal heating, for off-gas-grid homes is delayed to 2035 instead of phasing them out from 20261. The government said some of these homes are not suitable for heat pumps, and that delaying avoids homeowners spending around £10,000 to £15,000 on upgrades within three years1. An exemption to the 2035 phase-out of fossil fuel boilers, including gas, means households will not have to switch to a heat pump if their home is not suitable1.
The BUS is a £450 million funding pot and will receive an allocation from the £6 billion set aside for energy efficiency and clean heat over 2025 to 2028, so its future budget is not fixed1. Grants can be used alongside the £1 billion Great British Insulation Scheme, which the government said covers more than 300,000 homes1. The Heat Pump Investment Roadmap, published in April 2023, had already set out an extension of the scheme until at least 2028, alongside a target of 600,000 heat pump installations a year by 2028, up from 55,000 a year in 20213.
| Measure | Grant from 23 October 2023 |
|---|---|
| Air source heat pump | £7,500 (up from £5,000) |
| Ground source heat pump | £7,500 (up from £6,000) |
| Biomass boiler | £5,000 (unchanged) |
Source: Department for Energy Security and Net Zero1
Why it matters for households
For a household weighing up a heat pump, the grant is paid as an upfront discount on the installation, with the installer passing on the full value and handling the paperwork1. The higher figure narrows the gap between a heat pump and a gas boiler at the point of purchase, though the department's comparison rests on starting prices and supplier discounts rather than a full installed cost for every home1. The extension to 2028 removes the immediate deadline that had applied under the previous 2025 end date1.
The delay to the off-gas-grid boiler ban to 2035 changes the timetable for homes that are not on the gas network, including those using oil or LPG1. The government stated that some of these homes are not suitable for heat pumps and that a consultation on alternative approaches would follow1. Eligibility rules at the time required an eligible Energy Performance Certificate issued within the last decade, with no outstanding recommendations to install loft or cavity wall insulation2; the government said customers do not apply themselves and can check eligibility on GOV.UK1.
What happens next
The government said it would consult on alternative approaches to decarbonising off-gas-grid homes, and that the consultation would make clear it does not propose any household installs a low carbon option not suitable for its home1. The Heat Pump Investment Roadmap set out a market-based mechanism for heat pumps from 2024 and a Future Homes Standard for new build in 20253.
Sources3 cited
- Heat pump grants increased by 50% - GOV.UK, gov.uk
- Need Information on the Cost of Having a Heat Pump Installed?, altoenergy.co.uk
- Heat Pump Investment Roadmap, assets.publishing.service.gov.uk