The Department for Energy Security and Net Zero increased Boiler Upgrade Scheme grants for heat pumps from 23 October 2023. Air source heat pump grants rose from £5,000 to £7,500 and ground source heat pump grants from £6,000 to £7,5001. Biomass boiler grants remain at £5,0001. The scheme applies in England and Wales2.
The department described the increase as a 50% rise in support for air source models, and said the scheme had been extended by three years to 20281. It also said it was making £10 million available through the Heat Pump Ready programme and launching a "Welcome Home to Energy Efficiency" campaign1. The department said the typical cost of buying and installing a gas boiler is estimated at between £2,500 and £3,000, and that starting prices for heat pumps could now be below this for some households when the grant and supplier discounts are taken into account1.
"As promised by the Prime Minister as part of the government's pragmatic approach to net zero, the Boiler Upgrade Scheme will offer £7,500 towards the cost of a new heat pump, a 50% increase in the support available for air source models"
Applications are installer-led: a householder agrees a quote with an MCS certified installer, who submits the voucher application and paperwork, and Ofgem then contacts the customer to confirm they wish to proceed1. Ofgem administers the scheme and reports that the grant application is a two-stage process, with a voucher issued at stage one and grant payment made after commissioning at stage two3.
| 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 |
Source:1
Ofgem's quarterly report covering August to October 2023 recorded a sharp reduction in applications between the announcement of the uplift in late September 2023 and its introduction on 23 October, followed by a significant increase in volumes from 23 October to the end of that quarter4. The following quarter, November 2023 to January 2024, saw 5,981 applications and 5,796 vouchers issued, against 6,005 applications and 2,285 vouchers issued in the preceding quarter5. Ofgem later reported that around 10% of air source heat pump and biomass vouchers issued in that period expired unredeemed, which it said was in line with previous quarters3.
Alongside the grant increase, the government said it was delaying the ban on installing oil and liquified petroleum gas boilers, and new coal heating, for off-gas-grid homes to 2035 instead of phasing them out from 2026, and setting an exemption so households would not have to switch to a heat pump if their home is not suitable1. It said some off-gas-grid homes are not suitable for heat pumps, citing solid wall insulation that can cost £10,000 to £15,000 or a significantly upgraded electricity connection, and that it would consult on alternative approaches the following year1. The department also said Boiler Upgrade Scheme grants can be used alongside the £1 billion Great British Insulation Scheme, which it said covers more than 300,000 homes1.
Why it matters for households
For a household replacing a fossil fuel heating system, the grant is a fixed capital contribution towards the upfront cost, not a running-cost subsidy. Raising the air source figure to £7,500 narrowed the gap between the grant for air source and ground source units, which previously differed by £1,000. The department's own comparison with gas boiler installation costs of £2,500 to £3,000 is an estimate of typical purchase and installation, and it does not cover running costs, which depend on the property, the system and the price of electricity relative to gas. The scheme's budget is capped and vouchers are issued first come, first served until the annual cap is reached, so timing within a scheme year can matter. The delay to the off-gas-grid boiler phase-out to 2035 changes the deadline for homes that are not suitable for a heat pump, and the stated exemption means suitability, rather than the date alone, determines what a household is expected to install.
What happens next
The scheme was extended by three years to 20281. The government said it would consult next year on alternative approaches to decarbonising off-gas-grid homes1. Ofgem publishes monthly scheme updates and quarterly reports on vouchers issued, grants paid and remaining budget3.
Sources5 cited
- Heat pump grants increased by 50% - GOV.UK, gov.uk
- Boiler Upgrade Scheme: changes to grant levels - GOV.UK, gov.uk
- Quarterly Report – Issue 8, ofgem.gov.uk
- Boiler Upgrade Scheme (BUS) Quarterly Report Issue 6 Aug-Oct 2023, ofgem.gov.uk
- Boiler Upgrade Scheme Quarterly Report Issue 7 - November 2023 to January 2024, ofgem.gov.uk