The Boiler Upgrade Scheme grant for air source and ground source heat pumps rose to £7,500 from 23 October 2023, according to Ofgem's twelfth quarterly report on the scheme, published on 30 May 20251. The uplift followed the tariff increase, and the report states the grant level "increased from £5,000 (air source) and £6,000 (ground source) to £7,500"1.
The report covers the period from 1 February 2025 to 30 April 2025 and sets out the scheme's budget position1. The Department for Energy Security and Net Zero announced in November 2024 that an additional £30 million was available for Year 3, running from 1 April 2024 to 31 March 2025, and on 30 January 2025 announced a further £25 million, increasing the total Year 3 budget to £205 million1. The Secretary of State also gave permission for Ofgem to over-allocate vouchers to a total of £280 million1. For Year 3, £189,737,500 was allocated from that £280 million1.
In the quarter from February to April 2025, 11,268 voucher applications were received and 9,730 vouchers were issued, with a value of £72,905,0001. In the same period, 7,209 voucher redemption applications were received and 7,010 grants were paid, worth £52,535,0001. Since the scheme launched on 23 May 2022, 79,964 applications have been received, 57,085 vouchers issued at a value of £387,792,000, and 51,109 grants paid totalling £343,034,5001.
Of the 51,109 grants paid to date, 49,619, or 97.1%, were for air source heat pumps; 1,152 (2.3%) were for ground source heat pumps; 311 (0.6%) were for biomass boilers; and 27 (0.05%) were for shared ground loop ground source heat pumps1. The regulations were amended in May 2024 by the Boiler Upgrade Scheme (England and Wales) (Amendment) Regulations 20241.
"From 23 October 2023, the grant level for air source heat pumps and ground source heat pumps increased from £5,000 (air source) and £6,000 (ground source) to £7,500."
| Scheme year | Budget | Allocated |
|---|---|---|
| Year 1 (23 May 2022 to 31 March 2023) | £150 million | £50,039,000 |
| Year 2 (1 April 2023 to 31 March 2024) | £150 million | £88,455,500 |
| Year 3 (1 April 2024 to 31 March 2025) | £205 million (with over-allocation permitted to £280 million) | £189,737,500 |
Why it matters for households
The grant level is the sum deducted from the upfront cost of an eligible installation, so the move to £7,500 changed the arithmetic for any household weighing an air source or ground source heat pump against a replacement fossil fuel boiler. The scheme applies in England and Wales, and the report does not set out rates for Scotland or Northern Ireland, where separate arrangements operate; those rates are not given here1.
The budget figures show the scheme has been running close to its annual allocations, with Year 3 spend of £189,737,500 against a £205 million budget and permission to over-allocate to £280 million1. For a household, that matters because voucher availability depends on remaining budget rather than on demand alone. The report also shows the scheme is overwhelmingly an air source programme: 97.1% of grants paid to date went to air source heat pumps, against 2.3% for ground source and 0.6% for biomass1. Ground source installations carry higher typical costs, and the ground source heat pump cost picture is different from air source, though the report does not give installed costs.
The report does not state eligibility rules, property requirements or the treatment of homes on gas, so those points are not covered here. Households comparing support routes may find the Boiler Upgrade Scheme and ECO4 serve different purposes, and the report does not compare them1.
What happens next
Entering Year 4 of the scheme, £295 million of funding has been made available, with £14,882,500 allocated in April 2025, leaving a remainder of £280,117,500 for the rest of the scheme year1. Ofgem publishes a monthly scheme update and a more detailed annual report by 31 July each year1. No end date for the scheme beyond these arrangements is given in the report1.
Sources1 cited
- Quarterly Report – Issue 12, ofgem.gov.uk