What is the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme gives grants to people who install a low-carbon heating system in place of existing gas or oil heating. Here's how it works.
Marianne Calnan
Boiler Upgrade scheme heat pump

The Boiler Upgrade Scheme (BUS) could give you thousands of pounds towards adding low-carbon heating alternatives such as heat pumps to your home.

The BUS is a government scheme designed to help meet the UK’s 2050 net zero emissions target by driving down the cost of low carbon heating technologies and working with industry to ensure they are no more expensive to buy and run as traditional fossil fuel boilers.

It's designed to help homeowners in England and Wales afford the upfront costs of low-carbon heating.

The rates available for heat pumps increased in October 2023. You can now apply for £7,500 towards the cost of a heat pump.

Find out more about how renewable energy works and the different sources with our guide.

How does the Boiler Upgrade Scheme work?

Low carbon boiler

If you want to install an air source heat pump, ground source pump or biomass boiler to replace your traditional heating, you could get thousands of pounds towards the work.

You can't apply directly – your heating system installer, who must be registered with the scheme, will do this for you. Successful applicants receive one-off payments of up to £7,500 towards the cost of the installation project.

The funding is sent as a voucher to installers registered with the scheme. They're valid for a set period to make sure they're used quickly – three months for air-source heat pumps or biomass boilers and six months for ground source heat pumps. 

Upfront checks are carried out before vouchers are issued or grants paid to minimise non-compliance, fraud, and gaming of the scheme.

The scheme’s £450 million funding is expected to help install 90,000 heat pumps by 2025. But this is far fewer than the target of 600,000 a year announced in November 2020. 

While the government has stopped short of banning the installation of fossil-fuel boilers for now, it’s hoping that cleaner alternatives such as heat pumps will cost the same to buy and run as gas boilers by 2030, and therefore encourage more people to make the switch.

Is a heat pump right for you? Read our guide to choosing the best heating for your home

Which technologies are eligible for the Boiler Upgrade Scheme?

Grants are currently available for the following technologies. You can get one grant per property.

  • Air source heat pumps pull heat from the outside air and compress it to warm it up to heat your home.
  • Ground source heat pumps work in a similar way, taking heat from the ground underneath your property. 
  • Biomass boilers tend to work by burning wood or wood pellets to deliver heating and hot water to your home.

Read more: an introduction to the different types of heat pump  

Who can apply for the Boiler Upgrade Scheme?

You'll need to be a homeowner of an existing home in England and Wales. Private landlords can apply too.

The grants can only be used for replacing fossil fuel heating systems, such as gas, oil, or direct electric heating, and not for replacing existing low carbon systems. 

You must have a valid energy performance certificate (EPC) for the property (i.e. one that is less than ten years old), and it must have no outstanding recommendations for loft or cavity wall insulation. 

If your EPC does recommend either of these, you must carry out the recommendation(s) and obtain a new EPC before you can apply for a BUS grant. This is because your heating system will work more efficiently with these insulation measures in place. For further information and details of exceptions, speak to your installer.

Biomass boilers can only get BUS grants in rural areas (based on the Office for National Statistics’ definition) with no connection to the gas grid or when they replace existing fossil fuel systems that are not fuelled by mains gas or direct electric systems.

Heat pumps aren't suitable for all homes. They must be installed outside and require space indoors for a hot-water cylinder. 

Heat pumps work best in homes that are already energy efficient, so anyone living in a poorly insulated property may face bigger bills or colder rooms. 

The grant can only be used to install a heat pump that can meet the space heating and hot water heating demands of the property. It must have a capacity of no more than 45 kWth (kilowatt thermal) and a seasonal coefficient of performance (SCOP) of at least 2.8.

If you can’t install the recommended insulation because your property is listed, in a conservation area, or is otherwise exempt, you may still be able to apply, but you will have to provide evidence of exemption. New build properties are also not eligible unless you are a self-builder.


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How do you apply for the Boiler Upgrade Scheme?

Heat pump installation

If you decide the BUS is right for you, you can apply through the heating system installer you’ve chosen to do the work.   

The installer must be registered with the scheme and will apply on your behalf to Ofgem, which is administering the scheme for the government’s Department for Energy Security and Net Zero (DESNZ).

As with all home improvements, we recommend getting a quote from more than one installer before agreeing to any work.

There are several stages in the application process: 

  • Find a Microgeneration Certification Scheme (MCS) certified installer who can carry out the work, as only MCS certified installers can apply. The MCS is a nationally recognised standards organisation that assures the competence of installers and quality of products. You can find a local MCS certified installer here
  • The installer assesses the property and confirms that the installation is eligible for a grant. 
  • Agree a quote for the installation.
  • The installer applies for the grant on your behalf. You must give permission for the installer to pass on your details. 
  • Ofgem contacts you to check the validity of the application. You must confirm to Ofgem that the installer is acting on your behalf and that you are happy to proceed with the application. 
  • Your installer should deduct the value of the grant from the total cost payable by you. 
  • Once your new heating system is installed, the installer will commission the system and redeem the voucher to receive the grant. 

Make small changes to help the planet: The latest eco advice from Which?


How much funding do you get through the Boiler Upgrade Scheme?

Customer on phone

Funding is available for both air source and ground source heat pumps, as well as biomass boilers. 

You can apply for: 

These rates for heat pumps increased on 23 October 2023. If you applied before this date and your installer hasn't fitted your heat pump yet, ask your installer about cancelling your grant and reapplying for the higher amount.

The grant is not expected to cover the full cost of replacing your existing boiler with a low carbon alternative, however, so the process could still cost more than installing a new gas boiler. The typical cost of an air source heat pump is around £14,000, according to estimates by the Energy Saving Trust, meaning a £7,500 grant could cut the cost in half.

Find out how much you could save on your energy bills in our guide to air source heat pump costs and savings.

What's the difference between the Boiler Upgrade Scheme and Renewable Heat Incentive?

Family making a decision

The BUS has replaced the Domestic Renewable Heat Incentive (RHI), which closed to new applicants on 31 March 2022. 

The RHI offered tariff payments over seven years to financially reward people who use renewable energy to heat their homes, whereas the BUS is an upfront payment to help with installation costs. 

The BUS gives up to £7,500 upfront, whereas the RHI paid around £7,000 over seven years in quarterly installments.

Read our guide to buying a new boiler to find out about the types of boilers to choose the best one for your household

Is the Boiler Upgrade Scheme worth it?

Heat pump

The cost of a ground source heat pump depends on the size of the system. You'll also need to factor in the cost of fitting internal heating systems, like underfloor heating, if your property requires it. 

Cost also varies according to the size of the heat pump, the complexity of the system and whether you choose simple or advanced controls (such as a weather-compensated thermostat). 

You'll also need to allow for the cost of upgrading your radiators or installing underfloor heating for an air-to-water heat pump, which can cost several thousand pounds. Your homes might also need extra insulation.

But there is 0% VAT on the installation of energy saving materials including heat pumps and biomass boilers for the next five years, which will help reduce the cost.

You’ll need to decide whether your costs to install a renewable energy option in your home will be outweighed by your potential energy bill reduction and an uplift in your green credentials.

You're most likely to benefit from the BUS if your home is off the gas grid and you replace your current heating system with a renewable one. This is because off-gas-grid homes are usually more expensive to heat, so there's more potential to save on fuel bills. You can still install renewable heating and apply for the initiative if your home is connected to the gas grid, though.

Make sure that renewable heating is suitable for your home before you start. Read our guides to ensuring your home is well insulated and energy efficient.

Find out about other government energy grants available for your home.