The Boiler Upgrade Scheme (BUS) supports the decarbonisation of heat in buildings. It provides upfront capital grants to support the installation of heat pumps and biomass boilers in homes and non-domestic buildings in England and Wales.
£450 million of grant funding is available over three years from 2022 to 2025 with £150 million allotted to each year.
And in addition to the grants, air source heat pumps will be zero rated for VAT for 5 years from 1st April 2022.
Boiler Upgrade Scheme Grants help to pay for the installation of:
The scheme started on 1st April 2022 is expected to run until April 2025 but is only available to home owners in England and Wales. Also, for 5 years from 1st April 2022, air source heat pumps are zero rated for VAT.
You may be eligible for air source heat pump grants from the Boiler Upgrade Scheme if you:
The property will need to:
You can see the EPC for your home HERE if you live in England or Wales
How will the Boiler Upgrade Scheme work?
* MCS stands for Microgeneration Certification Scheme
As an organisation, they create and maintain standards relating to low-carbon products, installers and installations. MCS accreditation is a sign of excellence in a renewable installer.
It demonstrates that a company or its employees are competent to install a range of small-scale renewable and low-carbon technologies, including solar PV, solar thermal, biomass boilers, air source heat pumps, ground source heat pumps and battery storage.
Air source heat pumps absorb heat from the air outside your home. This can be transferred inside to heat central heating radiators and to provide hot water.
They can even work when the temperature outside is below zero.
Inside an air source heat pump there are several important components which extract heat from the air and use to to heat your home.
Air Source Heat Pump Grants in England and Wales from the Boiler Upgrade Scheme
Air Source Heat Pump Grants in England and Wales from the Boiler Upgrade Scheme
Heating homes, businesses and industry is responsible for a third of the UK’s greenhouse gas emissions. Switching to low carbon heating can help to reduce a building’s greenhouse gas emissions. The government’s ambition is to phase out the installation of new natural gas boilers beyond 2035 to ensure that almost all heating systems used in 2050 are low carbon. Air source heat pumps will play a major role in the pathway to net zero emissions as they are a well-established, proven technology which deliver effective heating and offer immediate and substantial carbon savings compared to fossil fuel heating.
The Boiler Upgrade Scheme aims to incentivise and increase the deployment of low carbon heating by providing targeted support to the supply chain.
Boiler Upgrade Scheme Grants
The Boiler Upgrade Scheme is an installer-led scheme which provides upfront capital grants to support the installation of heat pumps and, in limited circumstances, biomass boilers in domestic and non-domestic buildings in England and Wales. Grants of £7,500 are available for air source heat pumps (ASHPs), £5,000 for biomass boilers and £7,500 are available for ground source heat pumps (GSHPs).
The scheme has a committed budget of £450 million over three years from 2022 to 2025, with an annual budget allocation of £150 million.
Air Source Heat Pumps are zero rated for VAT
In addition, between 1 April 2022 and 31 March 2027, there is a zero rate of VAT on the installation of energy-saving materials including heat pumps and biomass boilers. This is another measure intended to incentivise the take up of energy saving materials in line with the government’s net zero objectives.
Ofgem (on behalf of the Gas and Electricity Markets Authority) is the administrator of the Boiler Upgrade Scheme.
Air to water air source heat pumps
ASHP systems must be hydronic (air-to-water) to be eligible under the Boiler Upgrade Scheme. This means that water is heated up to be directed through central heating radiators and a hot water supply to taps and showers. Air-to-air air source heat pumps systems are not eligible.
Installers – Must be MCS certified. MCS stands for Microgeneration Certification Scheme which creates and maintains standards relating to low-carbon products, installers and installations. MCS accreditation is a sign of excellence in a renewable installer.
It demonstrates that a company or its employees are competent to install a range of small-scale renewable and low-carbon technologies, including solar PV, solar thermal, biomass boilers, air source heat pumps, ground source heat pumps and battery storage.
Location – To qualify for the Boiler Upgrade Scheme the property must be in England or Wales.
Type of Building
Energy Performance Certificate
Previous Heating System – The previous heating system must have been a fossil fuel heating system that didn’t include a heat pump.
Capacity Limit – Heat pumps funded by a Boiler Upgrade Scheme grant must have a maximum capacity of 45 kWh. This would cover the vast majority of domestic and small non-domestic properties.
Other Funding – The installation cannot be funded by more than one source of public funds. Boiler Upgrade Scheme funding cannot be used in addition to other support from public funds or government schemes, such as the Energy Company Obligation (ECO) for the same new installation.
Location – For air source heat pumps the property must be in England or Wales.
Mains Gas Grid Connection – Property can be on or off the gas grid.
More families are choosing to ditch fossil fuel boilers for a cleaner alternative, after the government increased its grant by 50% for new heat pumps – making it one of the most generous schemes in Europe.
New figures published on 30th November 2023 show the number of new applications for government’s heat pump support surged after the increased £7,500 grant, announced by the Prime Minister, became available.
The number of new applications to the government’s Boiler Upgrade Scheme in the first week since the grant uplift reached 1,150 – more than 3 times higher than the average weekly rate prior to the change. In the subsequent 3 weeks, new applications have remained nearly 60% higher than the previous weekly average.
The scheme, which is available in England and Wales, provides financial support for families to switch from fossil fuel heating systems to a cleaner heat pump alternative – and as a result of the uplift, is now one of the most generous of its kind in Europe.
Energy Security Secretary Claire Coutinho said:
New figures show our pragmatic approach to net zero is working. In the first week after our 50% increase to the Boiler Upgrade Scheme, applications tripled.
We are supporting hardworking families who want to make the switch and replace their boiler in a way that’s within their budgets.
The results come alongside new independent research published today confirming heat pumps are generally rated as quiet, with a majority of those surveyed saying they did not notice the sound.
The review found complaints from neighbours are rare – with people far more likely to hear the noise of traffic and dogs barking, over of the sound of nearby heat pumps.
Lord Callanan, Minister for Energy Efficiency and Green Finance, said:
This fantastic increase in applications through the Boiler Upgrade Scheme demonstrates not only the desire for heat pumps in this country, but also that our approach to reach net zero works.
We want more families to enjoy the more stable bills and cleaner heating that heat pumps have to offer – and today’s evidence that heat pumps make minimal noise is yet another reason to make the switch.
The report examining the sound coming from heat pumps follows significant advances to reduce noise levels. The report concludes that heat pumps are now very quiet – with sound levels similar to a gas boiler or fridge.
Extensive research was carried out for the independent study by acoustic experts – who reviewed existing data and conducted interviews with households, installers, manufacturers, industry bodies, as well as local authority planning officers.
Currently some households need to seek full planning permission to install a heat pump. However, the report recommends a change in planning rules to make it easier for households to install heat pumps under permitted development rights – while also strengthening heat pump noise assessments conducted by installers to continue protecting the public from noise pollution.
The government announced, in theAutumn Statement, that it will consult on introducing new permitted development rights to end the blanket restriction on heat pumps one metre from a property boundary in England.
Customers do not have to apply for grants through the Boiler Upgrade Scheme. Anyone interested just needs to agree a quote for the work with an MCS certified installer, who will then do all the paperwork. Ofgem will simply contact the customer after that to confirm they would like to proceed.
Also today, the government confirmed plans for a new Clean Heat Market Mechanism, launching next year, which will incentivise the UK’s heating industry to invest in making heat pumps an increasingly attractive and affordable choice for families and businesses.