The Autumn Budget delivered by Rachael Reeves committed increased funding for the Boiler Upgrade Scheme (BUS), the grant scheme for heat pumps and biomass boilers in England and Wales1. The Budget allocated £1.8bn towards helping households in fuel poverty, with the remainder of that funding to be allocated to the BUS1.
The £1.8bn is over half of an additional £3.4bn commitment towards domestic energy efficiency improvements and decarbonisation over the next three years1. The fuel poverty funding is estimated to help over 225,000 UK households reduce their energy bills by over £2001. HETAS, the solid fuel and biomass certification body, said the exact figures for the BUS allocation are currently unclear and unlikely to be known for some time1.
The announcement follows the expansion of the definition of biomass boilers from March 2024, under which appliances with a cooking function that is not integrated and cannot be controlled separately to the property's heating function are now eligible in the scheme1. HETAS reported a 133.3% increase in biomass boiler BUS vouchers between August and September 20241.
"It is positive to see that government are committed to continuing to fund the Boiler Upgrade Scheme. This additional funding will alleviate concerns individuals may have had about the increased popularity of the scheme affecting new applications."
Separate figures published by Energy UK in April 2025 put the BUS budget for 2025/26 at £295 million, announced as part of the 2024 Autumn Budget, with budgets for scheme years from 2026/27 onwards to be confirmed in the Spending Review2. Kensa, a ground source heat pump manufacturer, states that a further £1.5 billion of funding covers the spending review period from 2025 to 2028, and cites Heat Pump Association calculations that this will fund 206,000 heat pump installations3. The sources give different figures for the funding and its period, and the exact split of the £1.8bn has not been reported1.
The Boiler Upgrade Scheme provides grants of up to £7,500 towards heat pump installations, administered by Ofgem in England and Wales3. It is not available in Northern Ireland and Scotland, where separate schemes operate3. Eligible properties must have a heat pump capacity of 45kW or less, and installations must meet a minimum SCOP of 2.83. Biomass support is limited to rural properties not suitable for heat pumps3. The scheme replaced the Domestic Renewable Heat Incentive, which ended on 31 March 2022, and runs from April 2022 to 20283.
Why it matters for households
The BUS is a flat-rate grant that offsets part of the cost of replacing a fossil fuel heating system, so the size of its budget determines how many households can receive a voucher in a given period. The scheme operates on a first-come, first-served basis for those who meet the eligibility criteria3, which means funding levels affect how long applicants can expect to wait and whether a voucher is available at the point of application. HETAS said the additional funding will alleviate concerns individuals may have had about the increased popularity of the scheme affecting new applications1.
For a household weighing up a heat pump, the grant reduces the upfront cost, but the remaining installation cost is paid by the property owner3. Eligibility depends on factors including a valid Energy Performance Certificate issued within the last 10 years, the existing heating system, and the property type; the scheme is not available for social housing or new-build properties, and those replacing an existing low-carbon heating system are not eligible3. Households can still apply if they have received separate funding for energy efficiency upgrades such as insulation, doors or windows3.
Energy UK states that heat from households represents around 17% of UK emissions, and that heat pumps are 300-400% efficient, converting one unit of electricity into 3-4 units of heat, compared with the newest gas boilers at 94% efficiency2. It adds that greater use of clean heat technologies would increase the UK's energy security and reduce carbon emissions2.
What happens next
The exact BUS allocation from the £1.8bn has not been reported1. The BUS budget for 2025/26 is £295 million, and budgets for scheme years from 2026/27 onwards will be confirmed as part of the Spending Review2.