The Department for Energy Security and Net Zero announced on 21 November 2024 a set of measures to support the transition to low-carbon heating, including additional funding for the Boiler Upgrade Scheme1. The scheme has been allocated an additional £30 million for the current financial year, and its budget for grant vouchers will almost double to £296 million for the next financial year1. MCS, the certification body for small-scale renewables, reported the figure as £295 million1; Mitsubishi Electric reported £296m2. The £7,500 grant per installation is unchanged1.
The announcement also covered the Clean Heat Market Mechanism, which will be introduced on 1 April 20251. The mechanism sets minimum annual heat pump sales targets for manufacturers1, and Mitsubishi Electric describes it as penalising traditional boiler manufacturers that fail to meet those targets2. Government support will be available for every heat pump installation required under the mechanism in 2025-26, alongside a phased approach to ensure supply chains are ready1.
A further change removes the rule requiring air source heat pumps to be installed at least 1 metre from a property's boundary, meaning homeowners in England no longer need to submit a planning application1. Mitsubishi Electric states the 1-metre rule previously prevented 27% of customers from having a heat pump installed2.
Ian Rippin, chief executive of MCS, said of the grant:
"The £7,500 grant makes switching to heat pumps more affordable and accessible for consumers. By requiring MCS certification, those using a Boiler Upgrade Scheme grant can be confident in the quality and performance of their low-carbon heating installations. We welcome any additional funding and look forward to the continued growth."
Two further measures were reported by Mitsubishi Electric but not by MCS. A contract has been awarded to the Behavioural Insights Team to encourage public adoption of heat pumps and highlight the availability of grants and users' positive experiences, and a new centralised hub on GOV.UK is being developed to consolidate funding options, installer directories and other resources into a single point of access for homeowners, landlords and tenants2. Mitsubishi Electric also reports that the government intends to shelve plans to ban new gas boilers by 2035 and that this year's introduction of the Future Homes Standard could be delayed2. These points do not appear in the MCS announcement1.
| Measure | Detail | Date |
|---|---|---|
| BUS additional funding, current year | £30 million | Announced 21 November 20241 |
| BUS voucher budget, next year | £295m1 / £296m2 | Next financial year |
| Grant per installation | £7,500 | Unchanged1 |
| Clean Heat Market Mechanism | Minimum annual heat pump sales targets for manufacturers | 1 April 20251 |
| 1-metre boundary rule | Removed; no planning application in England | Announced 21 November 20241 |
Why it matters for households
The Boiler Upgrade Scheme is the main grant route for replacing a fossil fuel heating system with a heat pump or biomass boiler in England and Wales, and the size of its voucher budget determines how many households can draw on it in a year. A larger budget reduces the chance of the fund being exhausted before an application is made, though the grant amount itself, at £7,500, is not changing1. Households weighing up a heat pump cost with the BUS grant are working from the same headline figure as before.
The planning change matters for homes where an outdoor unit could not be sited a metre from the boundary. Removing that requirement widens the set of properties where an air source heat pump can go in without a planning application in England1, which bears on whether a home can move off gas at all. The eligibility rules where a gas boiler is already fitted are not altered by this announcement.
The Clean Heat Market Mechanism shifts pressure onto manufacturers rather than households, by requiring minimum heat pump sales1. Mitsubishi Electric notes that an estimated 80,000 heat pumps were sold in 2024, a figure dwarfed by gas boiler installations and modest beside France and Germany, and that a shortage of qualified installers needs to be addressed for wider uptake2. MCS states that MCS certification is required for installations using the grant1.
What happens next
The Clean Heat Market Mechanism is due to be introduced on 1 April 20251. The increased voucher budget applies to the next financial year1. The reported intention to shelve the 2035 ban on new gas boilers and a possible delay to the Future Homes Standard have not been given dates2.
Sources2 cited
- MCS responds to government announcement on measures to support low-carbon heating - MCS, mcscertified.com
- A pivotal year for heat pumps | Mitsubishi Electric, les.mitsubishielectric.co.uk