The government confirmed in the June 2025 spending review that funding for the Boiler Upgrade Scheme (BUS) will increase each year to 2029/30, as part of its Warm Homes Plan1. The Energy and Utilities Alliance (EUA), a trade body, said the review "announced that the BUS would grow over the next four years"2. The BUS pays a capital grant towards installing a low carbon heating system in place of a fossil fuel boiler, and is open to applicants in England and Wales1.
The scheme currently offers £7,500 towards the installation and capital costs of an air source or ground source heat pump1. According to DESNZ, the average installation cost of a heat pump under the BUS is £13,000, so a household receiving the £7,500 subsidy would still need to find an average of £5,500 itself2.
Only 4 per cent said more than £5,0002. The same polling found 65 per cent said achieving net zero emissions by 2050 was important, against 27 per cent who said it was not, down slightly from 69 per cent to 21 per cent a year earlier2.
"Heat pumps have a role to play in decarbonising UK homes, especially for the relatively well-off. For the vast majority of households, they simply are unwilling to spend the sums needed to fit them. Something needs to change, we need a new plan."
The EUA also said that consumers on a standard tariff face higher running bills with a heat pump than with a gas boiler, and that its members are technology agnostic2. The two accounts differ on the timing of the funding commitment: the EUA dates the announcement to the recent spending review, while Grant UK records that in June 2025 the government confirmed funding would increase each year to 2029/302. Neither source sets out the annual funding totals.
Why it matters for households
The BUS is the main capital grant for replacing a fossil fuel boiler with a heat pump in England and Wales, so the confirmation of rising funding to 2029/30 affects how much support is expected to be available over the life of the scheme1. The gap between the grant and the average installation cost is the figure that determines what a household pays: £5,500 on average, on DESNZ's £13,000 average cost2. Eligibility rules shape who can use the grant at all. Grants cover domestic and non-domestic buildings up to 45kWth capacity, but social housing and new builds are not eligible, while custom new and self-builds can apply1. The heat pump must replace an existing fossil fuel system or direct electric heating, with an exception for custom new builds, and hybrid fossil fuel systems are not eligible1. Installers must be MCS certified and members of a Consumer Code, and the installed heat pump must have a minimum SCOP of 2.81. Ofgem administers the scheme, and the grant is paid to the installer, reducing the invoiced cost to the homeowner1.
What happens next
The BUS is administered by Ofgem, with applications led by the installer through a voucher application and a later redemption application1. Applications are only eligible where the system was commissioned no more than 120 days before the application is made1. The sources do not report the annual funding figures attached to the four-year growth, or how the increased funding will be allocated.
Sources2 cited
- What is the Boiler Upgrade Scheme? Updated Blog | Grant UK, grantuk.com
- EUA | Energy and Utilities Alliance, eua.org.uk