The Boiler Upgrade Scheme explained

To help meet the UK’s net zero targets, the Government is encouraging more people to upgrade from their traditional fossil fuel boilers to a more energy-efficient solution, like a heat pump.

The Boiler Upgrade Scheme (BUS) is the Government’s financial support tool to help make installations of low carbon heating technologies more affordable. Heat pumps are more costly than gas boilers as they often take longer to install, therefore the BUS is designed to make the transition to decarbonised home heating easier by reducing the upfront costs of heat pumps for homeowners in England and Wales.

The scheme is open to property owners in England and Wales and will run until 2028 and has been granted an extra budget of £1.5 billion as part of an almost £4bn strategy to reduce the UK’s carbon emissions.

Alongside this BUS, there is 0% VAT on installing energy-saving materials including heat pumps. The 0% VAT will run until March 2027.

Please note: For those living in Scotland, there is a different type of funding option. Please learn more about the Home Energy Scotland (HES) grant. In Northern Ireland, there may be alternative funding available.

BUS is open to all eligible domestic property owners in England and Wales intending to install a low-carbon heating system with the intent of more people moving away from traditional fossil fuel systems.

The BUS is an ‘installer led scheme’, it is operated in the form of a grant voucher which the installer will apply for on your behalf. After the heat pump has been fitted, the expected amount will be deducted from the upfront cost.

Heat pumps can be more costly compared to gas boilers as they often take longer to install. Therefore they can be a barrier for people looking to change or replace their boiler.

BUS operates in the form of a grant voucher in which the installer will apply for the voucher on your behalf before the installation. After the heat pump has been fitted, the expected amount will be deducted from the upfront cost.

The BUS provides a grant of up to £7,500 to reduce the upfront installation cost of your chosen low-carbon system.

The Government grant is applied for by your MCS accredited installer (Microgeneration Certification Scheme) and should be discounted from the total cost of installation within their quote. The installer will apply for the BUS grant as part of the consultation phase after they have inspected your property to see your property's suitability for a heat pump.

Dependent on your eligibility, you may be able to claim the following:

• £7,500 off the cost and installation of an air source heat pump;
• £7,500 off the cost and installation of a ground source heat pump (includes water source);
• £5,000 off the cost and installation of a biomass boiler.

Application for the BUS grant is available only to MCS (Microgeneration Certification Scheme) accredited renewables installers and is conducted through Ofgem, the Government’s scheme administrator.

Biomass boilers are only eligible for the scheme in very limited circumstances. If the property is located in a rural area that is not connected to the gas grid (heat pumps are eligible either on or off the gas grid).

For more information, please check your eligibility through the government website.

You may be eligible if you:

• Live in England or Wales.
• Own your property (whether this is a home or a small non-domestic property).

Property eligibility:

The property will need to have:

• A valid Energy Performance Certificate generated within the last 10 years (EPC).

You can find and check your EPC certificate through the Gov.uk website.

New build properties and social housing are not currently eligible for the Boiler Upgrade Scheme except for custom-build properties (such as if you are building your own home). Custom new builds do not require an EPC, but must principally be built with the labour and resources of the first owner and must be owned by an individual.

Technology eligibility:

• For your chosen low-carbon technology to be eligible for the scheme, it must:

• Not yet been installed or commissioned within the last 120 days.
• Fully replace an existing fossil fuel system (such as oil, gas, or direct electric).
• Have an installation capacity of no more than 45kW (this covers most homes) or have a shared ground loop capacity of 300kW (only applicable for ground source heat pump installs).
• Meet the full space heating and hot water demands of the property.

If you’re looking to start your heat pump journey, you can find all the information from suitability, how to buy, and Vaillant’s range of heat pumps.

Alternatively, you can find your local installer and they will be able to advise you on what type of low-carbon heating system is suitable for your property, which system is the most efficient for your needs, and how a heat pump can help to reduce your energy bills.

Unfortunately, conventional hybrid systems that use a fossil fuel source or solar thermal heating systems are not included in the eligibility for the scheme. However, if a hybrid system is installed with a heat pump and solar thermal, then this may be eligible providing the heat pump covers all of the heat and hot water requirements (as there is no specific funding for solar thermal systems themselves).

For further eligibility criteria and exceptions, please review the government legislation and speak to your local heat pump installer.