The Boiler Upgrade Scheme (BUS) offers homeowners in England and Wales up to £7,500 towards replacing a gas or oil boiler with a heat pump. With a £295 million budget for 2025/26, grants are widely available – but you need an MCS-certified installer to apply on your behalf. This guide covers eligibility, grant amounts, how to apply, and whether a heat pump is worth it after the discount.
- £7,500 off heat pump installation - the Boiler Upgrade Scheme covers air source and ground source heat pumps for homeowners in England and Wales
- £295 million budget for 2025/26 - a 44% increase from the previous year, with Ofgem authorised to over-allocate up to £280 million in vouchers
- No upfront cost to apply - your MCS-certified installer handles the entire application through Ofgem and deducts the grant from your bill
- 120-day installation window - once approved, your installer must commission the system within 120 days or the voucher expires
- EPC required but insulation rules relaxed - you need a valid Energy Performance Certificate (issued within 10 years) but loft and cavity wall insulation is no longer mandatory
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What Is the Boiler Upgrade Scheme?
The Boiler Upgrade Scheme (BUS) is a UK government grant that pays up to £7,500 towards replacing your fossil fuel heating system with a heat pump or biomass boiler. Launched in April 2022 and administered by Ofgem, the scheme is part of the government’s Warm Homes Plan to decarbonise UK heating.
The scheme is available to property owners in England and Wales. It covers the cost of equipment and installation, with the grant deducted directly from your installer’s quote. You never receive the money yourself – it goes straight to your MCS-certified installer.
The government increased the BUS budget to £295 million for 2025/26 – up from £205 million the previous year. Heat pump grants were also raised from £5,000 to £7,500 in October 2023, making the scheme significantly more attractive.
How Much Can You Get?
You can only claim one grant per property. The grant is applied as a discount on your installation cost, so if a heat pump costs £12,000 to install, you would pay £4,500 after the £7,500 BUS grant.
What does a heat pump actually cost after the grant?
| System Type | Typical Cost | BUS Grant | You Pay |
|---|---|---|---|
| Air source heat pump | £10,000 – £15,000 | -£7,500 | £2,500 – £7,500 |
| Ground source heat pump | £15,000 – £35,000 | -£7,500 | £7,500 – £27,500 |
| Biomass boiler | £10,000 – £19,000 | -£5,000 | £5,000 – £14,000 |
These figures are based on typical UK installation costs from MCS-certified installers. Your actual cost depends on property size, existing pipework, and whether you need additional radiators or underfloor heating. See our air source heat pump cost guide for detailed breakdowns.
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Who Can Apply?
The Boiler Upgrade Scheme is available to property owners in England and Wales who are replacing a fossil fuel heating system. Here are the full eligibility requirements.
You CAN apply if:
- ✓ You own the property (including landlords, second homes, and business premises)
- ✓ You are replacing oil, gas, LPG, or electric storage/panel heating
- ✓ Your property has a valid EPC (Energy Performance Certificate) issued within the last 10 years
- ✓ You use an MCS-certified installer
- ✓ Your property is in England or Wales
You CANNOT apply if:
- ✗ Your property is a new build (still being built by a developer)
- ✗ Your property is social housing
- ✗ You have already received government funding for a heat pump or biomass boiler
- ✗ You want a hybrid heat pump system (the full system must be low-carbon)
- ✗ You are replacing an existing low-carbon heating system
- ✗ Your property is in Scotland or Northern Ireland (separate schemes apply)
Biomass boiler: additional rules
Biomass boilers have stricter eligibility. Your property must be off the gas grid AND in a rural area. The boiler needs an emissions certificate, and it cannot be installed in self-build properties. For most homeowners, an air source heat pump is the simpler and more cost-effective choice.
Landlords can apply for the BUS grant on rental properties. The grant covers the installation cost, and the improved EPC rating can increase your property value and help meet Minimum Energy Efficiency Standards (MEES). Your tenants benefit from lower heating bills.
How to Apply: Step-by-Step
The Boiler Upgrade Scheme is “installer-led” – you do not apply directly to the government. Your MCS-certified installer handles the application through Ofgem. Here is the process.
- Get quotes from MCS-certified installers – Find at least three local installers certified by the Microgeneration Certification Scheme (MCS). Check the MCS installer directory to search by postcode.
- Check your EPC – You need a valid Energy Performance Certificate issued within the last 10 years. Check yours at GOV.UK Find an Energy Certificate. If you do not have one, an assessment costs £60 – £120.
- Choose an installer and agree a quote – The installer’s quote should show the BUS grant as a line-item discount. Confirm they will handle the Ofgem application.
- Installer submits application to Ofgem – Your installer applies on your behalf through the Ofgem portal. Ofgem will contact you to confirm you have authorised the application.
- Voucher issued – Ofgem issues a voucher to your installer. The installer then has 120 days to complete and commission the installation.
- Installation and sign-off – Once installed, your installer registers the system with MCS and the grant is paid directly to them. You pay only the balance after the grant.
The entire process typically takes 4 – 8 weeks from first quote to installation, depending on installer availability and Ofgem processing times.
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Boiler Upgrade Scheme vs Other Grants
The BUS is not the only government scheme that can help with heating costs. Here is how it compares to other options you may be eligible for. For a full overview of heating grants, see our UK boiler grants guide and heat pump grants guide.
| Scheme | What It Covers | Grant Value | Who Qualifies |
|---|---|---|---|
| Boiler Upgrade Scheme (BUS) | Heat pumps, biomass boilers | £5,000 – £7,500 | All homeowners (England & Wales) |
| ECO4 | Insulation, boilers, heat pumps | Fully funded | Low-income households on benefits |
| Great British Insulation Scheme | Cavity wall, loft, underfloor insulation | Fully funded | Homes in Council Tax bands A-D (England) or A-E (Scotland/Wales) |
| Home Upgrade Grant (HUG2) | Insulation, heating, solar | Up to £10,000 | Low-income, off-gas-grid homes (England) |
| Smart Export Guarantee (SEG) | Solar panel export payments | 4 – 15p per kWh exported | Solar panel owners |
You can combine the BUS with some other schemes. For example, you could get insulation through the Great British Insulation Scheme AND a heat pump through BUS. However, you cannot combine BUS with ECO4 for the same heating system.
Is a Heat Pump Worth It After the Grant?
With the £7,500 BUS grant, the economics of heat pumps have improved significantly. Here is a realistic breakdown for a typical 3-bedroom semi-detached house.
Running costs compared
| Heating System | Annual Running Cost | Install Cost (after BUS) | Payback Period |
|---|---|---|---|
| Gas boiler (new) | £850 – £1,100 | £2,500 – £3,500 | N/A (baseline) |
| Air source heat pump | £550 – £850 | £2,500 – £7,500 (after BUS) | 5 – 12 years |
| Oil boiler | £1,000 – £1,500 | £3,000 – £4,500 | N/A |
Heat pumps are most cost-effective when replacing oil, LPG, or electric heating – the savings are larger and the payback period is shorter. Replacing a gas boiler with a heat pump currently offers smaller annual savings (£100 – £300), but the gap is expected to widen as gas prices rise and electricity becomes greener.
If you switch to a heat pump tariff like Octopus Cosy or Octopus Go, you can get electricity at 7 – 10p per kWh during off-peak hours. This can reduce heat pump running costs to £400 – £600 per year – roughly half the cost of gas heating.
Common Questions About the Boiler Upgrade Scheme
Can I get the grant if I have already installed a heat pump?
No. The BUS grant must be applied for before installation begins. Your installer submits the application, and the voucher must be issued before work starts. Retrospective applications are not accepted.
What if I am on benefits?
If you receive means-tested benefits (Universal Credit, Pension Credit, Child Tax Credit, etc.), you may qualify for ECO4 instead of BUS. ECO4 can fund the entire installation cost, not just £7,500. Check with your local authority or an ECO4 installer.
Does the grant cover underfloor heating or new radiators?
The BUS grant covers the heat pump unit and its installation. It does not specifically cover additional work like upgrading radiators or installing underfloor heating. However, many installers include these in their overall quote, and the grant reduces the total bill regardless.
Can I combine BUS with a solar panel installation?
Yes. The BUS grant is for heating only, and solar panels are a separate system. You can install solar panels alongside a heat pump and benefit from both the BUS grant and the Smart Export Guarantee (SEG) for excess electricity. Many households pair solar panels with a heat pump to further reduce running costs.
What happens if the scheme runs out of money?
The 2025/26 budget is £295 million – a significant increase. Ofgem is also authorised to over-allocate vouchers beyond the annual budget to prevent gaps. The scheme is expected to continue until at least March 2028, though future budgets depend on the government’s Spending Review.
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