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 – rising to £9,000 for off-gas-grid homes replacing oil or LPG until 31 March 2027. With a £400 million budget for 2026/27 – the largest since the scheme launched – 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.
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- £7,500 off a heat pump - £9,000 for off-gas oil/LPG homes - covers air source and ground source systems in England and Wales; the higher rate runs 21 July 2026 to 31 March 2027
- £400 million budget for 2026/27 - a 36% increase on the £295 million 2025/26 budget, the largest BUS allocation since the scheme launched
- 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
- No EPC required since April 2026 - installers can use a recent utility bill and photos of your existing heating system instead, and outstanding loft or cavity insulation no longer blocks a grant
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 £400 million for 2026/27 - the largest allocation since the scheme launched - and removed the EPC requirement to apply from 28 April 2026. Air-to-air heat pumps became newly eligible for a £2,500 grant, and off-gas-grid homes replacing oil or LPG heating can claim £9,000 (up from £7,500) between 21 July 2026 and 31 March 2027.
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 |
| Air source heat pump (off-gas, replacing oil/LPG) | £10,000 – £15,000 | -£9,000 (to 31 Mar 2027) | £1,000 – £6,000 |
| 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 CANNOT apply if:
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 (optional since April 2026) – A valid Energy Performance Certificate is no longer required to apply. If you have one, check it at GOV.UK Find an Energy Certificate – your installer can otherwise use a recent utility bill and photos of your existing heating system.
- 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 – £9,000 | All homeowners (England & Wales) |
| ECO4 | Insulation, boilers, heat pumps | Fully funded | Low-income households on benefits |
| Warm Homes: Local Grant | Insulation and other efficiency measures | Up to £15,000 | Low-income households in England (council-run) |
| Home Upgrade Grant (HUG2) | Closed to applications | N/A – closed March 2025 | Superseded by Warm Homes: Local Grant (row above) |
| 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 Warm Homes: Local Grant (England) 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) | £950 – £1,100 | £2,500 – £3,500 | N/A (baseline) |
| Air source heat pump | £600 – £1,010 (tariff-dependent) | £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 new gas boiler roughly breaks even on a standard electricity tariff at Q3 2026 cap rates (26.11p electricity, 7.33p gas), while a dedicated heat pump tariff saves around £250 – £400 a year – a gap that widened in July 2026 when gas prices rose 24%.
If you switch to a heat pump tariff like Cosy Octopus or Scottish Power’s Heat Pump Saver, you can get off-peak electricity at 13 - 15p per kWh. This can reduce heat pump running costs to around £600 - £750 per year for a typical 3-bed semi - comfortably below the cost of gas heating.
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