The Department for Energy Security and Net Zero announced on 18 December 2023 that an additional £1.5 billion has been allocated to the Boiler Upgrade Scheme, the grant that supports the installation of low carbon heating systems in homes and non-domestic buildings in England and Wales1. The money forms part of a £6 billion capital package covering 2025 to 2028, announced at the Autumn Statement 2022 and allocated to new and existing schemes on that day1.
The department's own table gives the Boiler Upgrade Scheme allocation as £1.545bn across 2025/2026 to 2027/20281. The Heat Pump Association described the figure as equivalent to a 240% uplift in current annual funding, and noted that the 2024-2025 budget remains at £150m3. MCS said the increase equates to an additional 200,000 vouchers, on top of the scheme's initial £450 million budget when it launched in April 20222. The government said the 50% increase in the heat pump grant to £7,500 had already led to a 57% increase in applications1.
Other allocations in the same package include a new £400 million energy efficiency grant launching in 2025 for households in England, a £500 million local authority retrofit scheme for up to 60,000 low income and cold homes, £1.25 billion for the Social Housing Decarbonisation Fund to support up to 140,000 social homes, £485 million for the Green Heat Network Fund, £45 million for the Heat Network Efficiency Scheme and £225 million for the Industrial Energy Transformation Fund1. The department said the schemes are subject to business case approval and value for money assessments1.
"After the success of this scheme, an additional £1.5 billion of funding will ensure more homes and businesses can install heat pumps"
Industry bodies gave the announcement a mixed welcome. The Heat Pump Association said the funding showed a clear commitment to heat pump deployment but called for a firm commitment to increase the 2024-2025 budget, warning that at £150m it risks restricting growth in the market during that period3. The REA said UK deployment rates must be sped up and that the £7,500 grant level should be available for all technologies in the scheme, including biomass boilers, which it said have a specific role in off-gas grid, low energy efficient properties4. MCS said the uplift made low carbon heating more affordable for thousands of homeowners across England and Wales2.
Why it matters for households
The Boiler Upgrade Scheme pays a fixed sum towards the cost of an eligible heat pump or biomass boiler, so the size of the scheme's budget determines how many households can receive a grant before the money runs out. The additional allocation extends funding certainty to 2028, which MCS said would help installers and their customers plan with more confidence2. For a household weighing up a heat pump against a replacement fossil fuel boiler, the practical question is whether a voucher is still available at the point of application, and the grant amount and eligibility rules determine what a home can claim. The separate £400 million energy efficiency grant, covering measures such as bigger radiators or better insulation, is aimed at the fabric and heat distribution work that often accompanies a heat pump, though the department said further detail on its design, including its name, will be announced in due course1.
What happens next
The Heat Network Zoning Consultation runs until 26 February 2024, and the Future Homes and Buildings Standard consultation runs until 6 March 20241. The new local authority retrofit scheme is planned to open in 2025, and the £400 million energy efficiency grant launches in 20251. The department said the Great British Insulation Scheme and the Energy Company Obligation are set to help up to 700,000 families install improvements such as insulation by March 20261.
Sources4 cited
- Families, business and industry to get energy efficiency support - GOV.UK, gov.uk
- Government Announces £1.5 Billion to The Boiler Upgrade Scheme - MCS, mcscertified.com
- Heat Pump Association applauds newly announced Government support for warmer homes - HPA UK, hpauk.org.uk
- REA responds to Boiler Upgrade Scheme (BUS) - REA, r-e-a.net