Rising energy bills and growing pressure to cut carbon emissions have pushed many UK homeowners to look at low-carbon heating as a serious alternative to gas, oil, and LPG boilers. The main barrier has always been cost — heat pumps and biomass boilers are more expensive to install than a standard replacement boiler. That’s where the Boiler Upgrade Scheme Grant under the Boiler Upgrade Scheme (BUS) comes in.
Run by the UK Government and administered by Ofgem, the Boiler Upgrade Scheme offers grants worth thousands of pounds to homeowners and small businesses in England and Wales who want to replace a fossil fuel heating system with an energy-efficient heat pump or biomass boiler. This guide explains how much funding is available, who qualifies, how the application process works, and the key rules you should understand before applying.
Whether you’re replacing an old gas boiler, upgrading an oil or LPG heating system, or planning to make your home more energy efficient, the Boiler Upgrade Scheme can significantly reduce your installation costs. The grant is paid directly to your installer, meaning you benefit from an upfront discount rather than waiting for reimbursement after the work is complete.
Switching to low-carbon heating isn’t just about meeting environmental targets—it can also improve your home’s energy efficiency, reduce reliance on fossil fuels, and help protect you from future increases in fuel prices. While the initial installation cost of a heat pump or biomass boiler is generally higher than replacing a conventional boiler, government funding through the Boiler Upgrade Scheme makes the transition much more affordable for many households.
In recent years, demand for renewable heating systems has grown rapidly as more homeowners look for long-term solutions to rising energy costs. Air source heat pumps, ground source heat pumps, and biomass boilers are becoming increasingly popular because they provide reliable heating while producing significantly lower carbon emissions than traditional gas or oil boilers.
If you’re unsure whether your property is eligible, this guide covers everything you need to know—from eligibility requirements and grant amounts to the application process, installer requirements, and frequently asked questions. By the end, you’ll have a clear understanding of how the Boiler Upgrade Scheme works and whether it’s the right option for your home or business.
What Is the Boiler Upgrade Scheme?
The Boiler Upgrade Scheme is a government grant programme, launched in May 2022 and originally known as the Clean Heat Grant. It’s designed to help homeowners and small non-domestic property owners move away from fossil fuel heating systems — such as gas, oil, and LPG boilers — and switch to low-carbon alternatives, primarily air source heat pumps, ground source heat pumps, and biomass boilers.
The scheme is operated by the Department for Energy Security and Net Zero (DESNZ) and administered day-to-day by Ofgem. It forms part of the government’s wider Warm Homes Plan and its long-term commitment to reaching net zero carbon emissions by 2050. Since domestic heating is responsible for a significant share of the UK’s total carbon output, encouraging households to switch heating technologies is seen as one of the more direct ways to cut emissions at scale.
Crucially, the Boiler Upgrade Scheme is entirely grant-funded. It is not a loan, it doesn’t need to be repaid, and it isn’t means-tested — so your income or savings don’t affect whether you qualify. The scheme has already supported well over 100,000 applications since it launched, and demand has continued to grow year on year.
How Much Can You Get? Grant Amounts Explained
The Boiler Upgrade Scheme doesn’t pay a flat amount for every installation. The grant varies depending on which low-carbon technology you install:
- Air source heat pump: up to £7,500
- Ground source heat pump (including water source heat pumps and shared ground loop systems): up to £7,500
- Biomass boiler: up to £5,000
- Air-to-air (A2A) heat pump: up to £2,500, available in some cases
Unlike a rebate or cashback scheme, you never receive this money directly. Instead, the grant is paid to your MCS-certified installer, who deducts it from your final invoice. That means the discount is applied upfront — you simply pay the balance once the grant has been subtracted, rather than paying the full cost and waiting to be reimbursed later.
Temporary Uplift for Oil and LPG Households
To encourage more off-gas-grid homes to switch to cleaner heating, the UK Government has introduced a temporary increase in Boiler Upgrade Scheme funding for eligible properties.
From 21 July 2026 to 31 March 2027, homeowners and small businesses in England and Wales that currently rely on oil or LPG heating systems may receive up to £9,000 towards the installation of an air source heat pump or ground source heat pump. This enhanced grant replaces the standard £7,500 available under the scheme during the promotional period.
The temporary uplift is designed to support properties that are not connected to the mains gas grid, where heating costs are often higher and switching to low-carbon heating can have a greater environmental impact. By increasing the grant, the government aims to make renewable heating more affordable for households that traditionally face higher installation costs.
To qualify for the £9,000 grant, your property must meet the standard Boiler Upgrade Scheme eligibility requirements, and your existing heating system must be powered by oil or LPG. The installation must also be completed by an MCS-certified installer, who will apply for the grant on your behalf.
If you already have a live Boiler Upgrade Scheme voucher that was issued before 21 July 2026, you will remain eligible for the standard £7,500 grant. The enhanced £9,000 funding only applies to new voucher applications submitted on or after 21 July 2026.
Before proceeding with your installation, it’s a good idea to speak with your installer to confirm whether your property qualifies for the temporary uplift. They can verify your current heating system, check your off-gas-grid status, and ensure your application is submitted under the correct funding level.
Zero VAT on Installation
On top of the grant itself, installations of heat pumps and other qualifying energy-saving materials currently benefit from a 0% VAT rate, applied UK-wide, including Northern Ireland. Combined with the BUS grant, this can meaningfully reduce the total cost of switching to a low-carbon heating system.
This relief comes from HMRC’s VAT Notice 708/6, which zero-rates the installation of specified energy-saving materials in residential properties. Alongside air source and ground source heat pumps, the same 0% rate covers a range of related technologies, including:
- Solar photovoltaic (PV) panels
- Battery storage, when installed with or after solar
- Solar thermal hot water systems
- Wind turbines
- Loft, cavity wall, internal wall, and external wall insulation
- Insulation around hot water pipes and tanks
- Draught proofing
- Controls for central heating and hot water systems
The zero rate applies to both the cost of the equipment and the labour to install it, provided the supply and installation are contracted together as a single job. It does not extend to general building work carried out alongside an energy upgrade — for example, replacing a roof remains subject to standard VAT even if solar panels are fitted on top of it at the same time.
How big is the saving? On a heat pump installation costing around £11,000, the 0% rate saves roughly £1,800–£2,000 compared with paying standard-rate VAT, on top of whatever BUS grant you receive. Because the relief is applied automatically by the installer at the point of invoicing, there’s no separate application or paperwork — you shouldn’t see any VAT charge on the qualifying elements of your quote.
What to check on your invoice. It’s worth reviewing your installer’s paperwork carefully:
- The invoice should clearly show 0% VAT, or reference the zero-rated supply under the relevant Finance Act provisions.
- Supply and installation should be billed together on a single invoice rather than split into separate supply and installation invoices at different VAT rates.
- Confirm your installer is genuinely VAT-registered — if they aren’t, VAT wouldn’t be chargeable at all, and any VAT-related discount claims should be treated with caution.
When does the 0% rate end? The zero rate has applied since 1 April 2022. It is currently scheduled to run until 31 March 2027, after which qualifying installations are expected to revert to the reduced 5% VAT rate rather than the full 20% standard rate. Because heat pump installations often involve lead times of several months between quote and commissioning, anyone hoping to benefit from the 0% rate should factor this into their planning well before the deadline, since work completed after the cut-off would be charged at the higher rate. As with the BUS grant itself, it’s worth checking the current position on GOV.UK or with HMRC before committing, since deadlines for time-limited tax measures can occasionally be extended or adjusted by the Treasury.
Who Is Eligible for the Boiler Upgrade Scheme?
Eligibility rules cover the property, the applicant, and the type of installation. Here’s what typically needs to be true:
Location. The property must be in England or Wales. The scheme does not currently operate in Scotland or Northern Ireland — Scotland has its own separate scheme (Home Energy Scotland), which works differently and offers a combination of grant and loan funding.
Ownership. You need to own the property, whether it’s your main residence, a second home, or a small non-domestic building. Owner-occupiers, second homeowners, and private landlords who let out properties to tenants can generally apply.
Existing heating system. Your property must currently be heated by a fossil fuel system (gas, oil, or LPG boiler) or by direct electric heating without a heat pump already installed. The new low-carbon system must fully replace this — hybrid systems that combine a heat pump with a gas boiler are not eligible.
Property type. Most new-build properties and social housing are excluded, since developers building new homes are expected to install low-carbon heating as standard. Self-build and custom-build properties are an exception and can still apply.
No previous low-carbon heating grant. If the property has already received government funding specifically for a heat pump or biomass boiler — including through the now-closed Green Homes Grant or the Renewable Heat Incentive — it won’t be eligible for a further BUS grant. However, having received unrelated home improvement funding, such as support through the Energy Company Obligation (ECO), doesn’t disqualify you.
Valid EPC. You’ll need a valid Energy Performance Certificate for the property, issued within the last 10 years. Notably, there’s no longer a minimum EPC rating requirement, and loft or cavity wall insulation is no longer mandatory before installation — a change from the scheme’s earlier, stricter rules. Installers may still recommend insulation upgrades to help the heat pump perform efficiently, but it’s advisory rather than a strict condition of the grant.
System size. The heat pump or biomass boiler must have a maximum capacity of 45kWth, which covers the overwhelming majority of domestic properties.
Biomass boiler restrictions. Biomass boilers are only eligible in fairly limited circumstances — specifically, where the property is in a rural location and not connected to the gas grid.
Installer accreditation. Whichever technology you choose, the installation must be carried out by an installer certified under the Microgeneration Certification Scheme (MCS). Your installer will also need to be a member of an approved consumer protection code, such as the Renewable Energy Consumer Code (RECC) or the HIES Consumer Code.
Read more: Free Boiler Grants UK: Who Qualifies Under the ECO4 Scheme?How the Application Process Works
One thing that catches a lot of people out is that the Boiler Upgrade Scheme is installer-led — you don’t submit the grant application yourself. Here’s how the process typically unfolds from start to finish:
1. Get a Home Survey
Contact an MCS-certified installer for a home visit. They’ll carry out a heat loss survey to work out the right size and type of heat pump for your property, check whether any radiator or hot water cylinder upgrades are needed, and confirm your eligibility before you commit to anything. This usually takes one to two hours.
2. Receive a Quote
Your installer provides a full quote for the installation. This should clearly show the total installation cost, the BUS grant amount being applied, and the balance you’ll actually need to pay once the grant is deducted.
3. Installer Applies for the Voucher
Once you agree to proceed, your installer applies to Ofgem on your behalf for a BUS voucher. This application needs to include details about the property, the proposed system, and confirmation that all eligibility criteria are met. As part of this, you’ll need to provide consent and complete identity verification, since Ofgem needs this information before an application can be considered “properly made” and assessed.
4. Voucher Issued
If Ofgem approves the application, a voucher is issued confirming the grant amount for your installation. Vouchers are generally valid for a set period, giving you and your installer time to complete the work.
5. Installation Takes Place
Your MCS-certified installer carries out the work — removing the old fossil fuel system and installing the new heat pump or biomass boiler. Applications are only eligible where the low-carbon heating system has been commissioned no more than 120 days before the voucher application is redeemed, so timing between commissioning and paperwork matters.
6. Grant Redeemed and Deducted
After installation, the installer submits a redemption request to Ofgem confirming the work is complete. Once approved, Ofgem pays the grant directly to the installer, who has already deducted it from your final bill. You never handle the grant money yourself.
Because the process is installer-led, the most useful first step for most homeowners is simply reaching out to a few MCS-certified installers for quotes and eligibility checks, rather than trying to apply to Ofgem directly.
Things Worth Knowing Before You Apply
Funding is finite but budgeted annually. The government allocates an annual budget to the scheme — hundreds of millions of pounds — to cover new applications. While demand has grown steadily, the scheme has generally had sufficient budget to meet applications, though this can change, so it’s sensible not to leave things to the last minute if you’re planning to apply near a scheme deadline.
The scheme has an end date, but it keeps getting extended. BUS was originally due to run for a few years but has since been extended, with current guidance pointing to it continuing through to the end of 2027 or into 2028, depending on the source. Because these dates are set by government policy and can shift, it’s worth confirming the current end date with your installer or on the official Ofgem guidance before finalising plans.
Costs can still be substantial even with the grant. A heat pump installation, including any necessary radiator or pipework upgrades, is often more expensive than a straight like-for-like boiler swap, even after the grant is applied. Get more than one quote, and ask installers to break down exactly what’s included.
Renters generally can’t apply directly. Since the scheme requires property ownership, tenants aren’t eligible to apply themselves, though landlords can apply for rental properties they own.
Here’s more to add to that list:
Grant amounts vary by fuel type and technology. Standard grants are £7,500 toward an air source or ground source heat pump in any English or Welsh property, with no income test. Biomass boilers and some other technologies sit at a lower tier — biomass boilers receive £5,000, with a new lower tier of £2,500 for certain other eligible heating systems.
Off-gas-grid homes now get more. From 21 July 2026, the Boiler Upgrade Scheme pays £9,000 toward an eligible heat pump for off-gas-grid homes in England and Wales replacing oil or LPG heating — a temporary uplift announced by DESNZ on 26 June 2026. This higher rate is time-limited: it’s available from 21 July 2026 until 31 March 2027, and homes replacing mains gas or electric heating stay on the standard £7,500.
The insulation requirement is gone. Until fairly recently, applicants needed to meet minimum loft and cavity wall insulation standards before qualifying. That prerequisite was scrapped in April 2026, removing what had been the single biggest barrier blocking people from applying.
You apply through your installer, not directly. You get quotes from MCS-certified installers, pick one, and they submit a voucher application to Ofgem on your behalf. Once approved, the installer does the work and the grant comes straight off your invoice — you only pay the remaining balance. There’s no separate government form, no means test, and no interview.
It’s one voucher per property, not per technology. If you wanted both an air source heat pump and a heat battery, you’d have to choose which one to put the voucher toward.
Zero-rated VAT sweetens the deal further. From 1 April 2022 to 31 March 2027, there’s 0% VAT on the installation of energy-saving materials including heat pumps and biomass boilers — worth checking with your installer since it stacks with the grant itself.
Sources genuinely disagree on the exact end date. You’ll see 31 December 2027 in some places and March 2028 in others — this is a real inconsistency across sources reporting on the scheme, not just something your guide got wrong. It’s worth checking gov.uk or your installer at application time rather than relying on any single article.
One caveat worth flagging: a couple of these figures (like the exact 2025/26 budget total and the “extended to 2028” claims) come from smaller advisory or installer sites rather than Ofgem’s own guidance pages directly, so I’d treat those specific numbers as good-but-verify rather than gospel before you publish anything relying on them.
Read more: Household Support Fund Payment Dates 2026: Latest Council UpdatesIs the Boiler Upgrade Scheme still open in 2026?
Yes. The scheme remains active and open to new applications, with a temporary enhanced grant available for oil and LPG households between 21 July 2026 and 31 March 2027.
Do I need to pay tax on the grant?
No. The Boiler Upgrade Scheme grant is not treated as taxable income, since it’s paid directly to the installer rather than to you.
Can I apply for the grant myself, without going through an installer?
No. BUS is an installer-led scheme, meaning only MCS-certified installers can submit the voucher application to Ofgem on your behalf.
What happens if my application is refused?
If Ofgem finds the property or system doesn’t meet the eligibility criteria, the voucher application will be declined. Your installer should be able to explain why and advise whether it’s worth reapplying with amended details, such as an updated EPC.
Can I combine the Boiler Upgrade Scheme with other grants or discounts?
You can generally combine BUS with the 0% VAT rate on qualifying installations, and having received unrelated support like ECO funding for insulation doesn’t rule you out. However, you cannot combine it with a previous grant that specifically funded a heat pump or biomass boiler at the same property.
Is the scheme available in Scotland or Northern Ireland?
No. BUS only covers England and Wales. Scotland has a separate scheme, Home Energy Scotland, offering a combination of grants and loans worth up to £15,000 depending on the technology. There is currently no direct equivalent scheme in Northern Ireland.
Do I need to upgrade my insulation before I can apply?
Not necessarily. Earlier versions of the scheme had stricter insulation requirements, but these have since been relaxed. You’ll still need a valid EPC, but there’s no minimum rating required, and loft or cavity wall insulation is no longer a mandatory precondition — though your installer may recommend it for better system performance.
How long does the whole process take, from survey to installation?
This varies by installer and location, but a typical timeline includes the initial survey, a quote, voucher application and approval, then scheduling installation. Total time from first enquiry to a completed installation often runs from a few weeks to a couple of months, depending on installer availability and how quickly paperwork is processed.
Can landlords apply for rental properties?
Yes. Private landlords who own a residential property they rent out can apply for the Boiler Upgrade Scheme, provided the property and system meet all other eligibility requirements.
What if I’ve already got a heat pump but want to upgrade it?
If the property previously received a government grant specifically for a heat pump or biomass boiler, it typically won’t qualify for a further BUS grant, even if you’re replacing that system with a newer one.
Conclusion
The Boiler Upgrade Scheme remains one of the most substantial financial incentives available to UK homeowners looking to move away from fossil fuel heating. With grants of up to £7,500 for most heat pump installations — and a temporary uplift to £9,000 for oil and LPG households through to March 2027 — the scheme significantly narrows the cost gap between a conventional boiler replacement and a low-carbon heating system.
Eligibility has also become more accessible over time, with earlier insulation requirements relaxed and a broader range of property types now able to apply. That said, the process still depends heavily on working with an MCS-certified installer, since they handle the voucher application and grant redemption on your behalf.
If you’re weighing up whether to make the switch, the most practical next step is to get a home survey and a few quotes from certified installers. They’ll be able to confirm your exact eligibility, the grant amount you qualify for, and give you a clear picture of what you’d actually pay after the grant is applied — helping you decide whether now is the right time to upgrade.
This article is for general information purposes. Grant amounts, deadlines, and eligibility criteria are set by the UK Government and Ofgem and can change — always confirm current details on the official GOV.UK or Ofgem website, or with an MCS-certified installer, before making a decision.