On 30 January 2025 the Department for Energy Security and Net Zero (DESNZ) announced a further £25 million for the Boiler Upgrade Scheme, increasing the total BUS Year 3 budget from £150 million to £205 million1. The same announcement confirmed that the Secretary of State had given permission for Ofgem to over-allocate vouchers up to a total of £280 million, to provide certainty that vouchers would continue to be available1.
The £25 million followed an earlier addition. DESNZ announced in November 2024 that an additional £30 million was available to ensure sufficient funding for Year 3, which runs from 1 April 2024 to 31 March 20251. Ofgem's Issue 11 report, covering 1 November 2024 to 31 January 2025, recorded that as of 31 January 2025 £246,782,500 had been allocated from the total funds available in Year 3, leaving £33,217,500 still available, a figure that included the £75 million over-allocation amount5.
The scheme's budget position by year, as later reported, is set out below.
| Period | Budget allocation | Budget spent | Unspent or remaining |
|---|---|---|---|
| Scheme Year 1 (May 2022 to Mar 2023) | £150,000,000 | £50,009,000 | £99,991,000 |
| Scheme Year 2 (Apr 2023 to Mar 2024) | £150,000,000 | £88,410,500 | £61,589,500 |
| Scheme Year 3 (Apr 2024 to Mar 2025) | £280,000,000 | £188,845,000 | £91,155,000 |
| Scheme Year 4 (Apr 2025 to Mar 2026) | £295,000,000 | £244,337,500 | £50,662,500 |
Source: Ofgem, Issue 151. Unspent budget is not carried over to the next scheme year1.
The grant levels themselves were not changed by the January 2025 announcement. From 23 October 2023 the grant for air source heat pumps and ground source heat pumps rose from £5,000 (air source) and £6,000 (ground source) to £7,5002. Ofgem's property owner guidance states grants of £7,500 are available for air source heat pumps and ground source heat pumps, and £5,000 for biomass boilers4. The regulations governing the scheme were updated by DESNZ and came into force on 8 May 20244.
"On 30 January 2025, the Department for Energy Security and Net Zero announced a further £25 million of funding will be made available for the 2024/2025 financial year, increasing the total BUS budget to £205 million."
Why it matters for households
The BUS pays a fixed capital grant towards the cost of installing a heat pump, or in limited circumstances a biomass boiler, in domestic and non-domestic properties in England and Wales4. The size of the Year 3 budget determines how many vouchers can be committed in that financial year, so the January 2025 increase and the over-allocation permission widened the headroom available before the year-end reset. Ofgem noted in its Issue 11 report that increased usage could potentially exceed that year's budget, and that it was temporarily publishing a fortnightly budget overview until the budget reset at the end of March 20255.
For a household, the practical effect is on whether a voucher can be issued at the point an installer applies, not on the grant amount, which stayed at £7,500 for heat pumps. Eligibility turns on the property and the heating system being replaced, and the application is made by the installer rather than the householder. Ofgem's guidance sets out the eligibility rules, including the position where a gas boiler is already installed and the EPC and insulation requirement. Vouchers for air source heat pumps and biomass boilers are valid for three months1.
What happens next
The Year 3 budget reset at the end of March 20255. For Year 4, running from 1 April 2025 to 31 March 2026, the budget has been set at £295 million1. Ofgem's Issue 15 report records £244,337,500 allocated between April 2025 and January 2026, leaving £50,662,500 remaining for the rest of the scheme year1. Ofgem's property owner guidance states that BUS vouchers will not be issued after 31 December 20274.
Sources5 cited
- Boiler Upgrade Scheme Quarterly Report Issue 15, ofgem.gov.uk
- Quarterly Report – Issue 12, ofgem.gov.uk
- BUS Quarterly Report Issue 13, ofgem.gov.uk
- Boiler Upgrade Scheme: Property owner guidance V4, ofgem.gov.uk
- Quarterly Report – Issue 11, ofgem.gov.uk