On 21 November 2024 the government announced that the budget for the Boiler Upgrade Scheme for 2025/26 will be £295 million1. The announcement almost doubles the scheme's budget, according to a government consultation published in April 20252.
The BUS provides upfront capital grants towards low carbon heating in domestic and non-domestic properties in England and Wales. Grants of £7,500 are available for air source heat pumps and ground source heat pumps, and grants of £5,000 for biomass boilers1. The scheme has a committed budget of £450 million over three years from 2022 to 2025, split equally at £150 million per financial year1. On 30 January 2025 the Department for Energy Security and Net Zero announced a further £25 million for the 2024/2025 financial year, increasing the total BUS budget to £205 million, and the Secretary of State gave Ofgem permission to over-allocate vouchers to a total of £280 million1.
The consultation document sets out the government's view of the scheme's progress and its plans for expansion. It states that the scheme has supported the installation of over 49,000 heat pumps and biomass boilers, amounting to £328 million in grants, and that "the scheme needs to grow significantly in the coming years"2. The consultation seeks views on allowing property owners access to third-party ownership finance products alongside the scheme, amending eligibility so BUS-funded heat pumps can be installed alongside other low carbon technologies, and potentially expanding grant support to technologies not currently supported, such as air-to-air heat pumps and heat batteries2. It also seeks views on consumer protections, including adopting reforms to the Microgeneration Certification Scheme and requiring installers to deduct the grant value upfront rather than reimbursing property owners after the grant is received from Ofgem2.
"On 21 November the Government announced the almost doubling of the budget to £295 million for 2025/26"
The consultation also records related measures. The Clean Heat Market Mechanism launched on 1 April 20252. On 21 November the government announced over £5 million of investment in Ideal Heating as the first award from the Heat Pump Investment Accelerator Competition, which will provide up to £30 million in grant funding2. A "Warm and Fuzzy" heat pump marketing campaign was launched in March 20252.
Why it matters for households
The budget figure determines how many vouchers can be issued in a financial year, so a larger budget supports more grants. The grant levels themselves are unchanged by this announcement: £7,500 for air source and ground source heat pumps and £5,000 for biomass boilers1. Eligibility rules, including the requirements for homes with a gas boiler and the EPC and insulation requirements, are not altered by the budget announcement. The consultation proposals, if adopted, could change what technologies and financing arrangements qualify, but those changes are proposals only and have not been decided2. For a household weighing a heat pump against other support, the comparison with ECO4 and the application process set out how the scheme operates in practice.
What happens next
Ofgem states that it will not issue BUS vouchers after 31 December 20271. The consultation says further amendments designed to streamline Ofgem's administration of the scheme will be set out in the government response2.
Sources2 cited
- Boiler Upgrade Scheme: Property owner guidance V4, ofgem.gov.uk
- Boiler Upgrade Scheme and Certification Requirements Consultation, assets.publishing.service.gov.uk