The Boiler Upgrade Scheme (BUS) is a grant for people who install a low-carbon heating system in place of their existing gas or oil heating.
The government boiler scheme could provide you with thousands of pounds to put towards adding low-carbon heating alternatives to your home. The boiler grant is designed to help meet the UK’s 2050 net zero emissions target by driving down the cost of low-carbon heating technologies.
The government boiler replacement scheme launched in April 2022 and is designed for homeowners in England and Wales to help them afford the upfront costs required for low-carbon heating. If you apply for the boiler upgrade scheme, you could get £5,000 off the cost of a new air source heat pump, and £6,000 off the price of a ground source heat pump.
However, the scheme has only received a relatively insufficient £450m, which means a maximum of just 90,000 homes will be able to take advantage of the grant over the next three years. And, that’s despite the Climate Change Committee (CCC) stating that the UK needs to install 3.3 million heat pumps in existing homes by 2030 to reach their net-zero target.
The Boiler Upgrade Scheme is a UK government-run scheme that aims to help existing small domestic buildings transition to low carbon heating systems to heat their homes.
The scheme came into effect from 1 April 2022 and replaced the Renewable Heat Incentive (RHI) when it ended on 31 March 2022. The boiler grant is open to properties located in England and Wales.
In a nutshell, homeowners who wish to install air source heat pumps, ground source pumps or biomass boilers in their house to replace their traditional heating can apply for thousands of pounds towards the work.
Successful applicants will receive one-off payments of up to £6,000 towards the cost of the installation project. This will be sent as a voucher to the installers on behalf of the homeowners utilising the initiative. These vouchers will have a set period of validity to ensure they’re used in a timely manner. Before any vouchers are issued and the boiler grants are paid out, robust upfront checks will take place to minimise the risk of non-compliance, fraud and gaming of the scheme.
The boiler upgrade scheme’s £450 million funding is targeted to help install 90,000 heat pumps over a three year period. But this is far fewer than the aim of 600,000 per year announced by Boris Johnson in November 2020.
Homeowners who wish to install air source heat pumps, ground source heat pumps or biomass boilers are eligible under different circumstances to receive grants through the government boiler replacement scheme.
To be eligible for the UK government boiler upgrade scheme, you need to meet a few simple requirements:
To be eligible to apply for the new heating system grant, your EPC must meet a number of criteria:
If you meet all the eligibility criteria for the Boiler Upgrade Scheme, an installer can apply to get the grant on an air or ground source heat pump on your behalf. To qualify for a biomass boiler grant, there are some extra criteria to fulfil, in addition to the ones listed above. Your property must:
The government Boiler Upgrade Scheme funding 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 can’t apply for the Boiler Upgrade Scheme directly – your heating system installer, who must be registered with the scheme, must do so for you.
From 1 April 2022 until the closure of the scheme in April 2025, an installer will be able to apply for a voucher for a heat pump or biomass boiler installation, on a first come, first served basis.
Once your installer receives the voucher, they’ll have three months to use it to install an air source heat pump or a biomass boiler at your home, or six months to choose to get a ground source heat pump installed.
After the installation has been completed, they’ll be able to redeem this voucher to reduce the overall cost.
Yes, for 90,000 lucky homes, the government boiler grant will reduce the average cost of an air source heat pump from £10,000 to £5,000, making it cheaper than a new gas boiler.
The boiler scheme also means that moving from a gas boiler to a heat pump will save homeowners an average of £2,827 over its 20-year lifetime.
Ultimately, no. The scheme only allows for 30,000 heat pumps to be installed per year – that doesn’t even exceed the current rate of installations, which was 37,000 in 2020.
Currently, fewer than 250,000 homes have heat pumps. That means the UK is way off the 3.3 million target that the CCC says the government needs to reach by 2030 to achieve its net-zero emission goals by 2050.
Therefore, the installation rate must rise to one million installations per year by 2030. So, it’s difficult to see how 90,000 discounted heat pumps over three years – at most- is sufficient.
The Renewable Heat Incentive (RHI) is a government financial incentive to promote the use of renewable heat, which can help reduce carbon emissions and meet the UK’s renewable energy targets. So, how is the government Boiler Upgrade Scheme different?
One of the key differences is the type of funding available from both schemes. The Boiler Upgrade Scheme provides vouchers that could cover upfront costs of up to £5,000, whereas the RHI lets you earn annual payments for seven years based on your annual heat demand.
Through the tariff system of the domestic RHI, it is possible to earn up to £28,000 over a period of seven years. Compared to this, the funding through the boiler replacement scheme is pretty limited. But, the UK boiler grant, which is set to last only two years, may be further extended in time, as well as the amount of funding available.
Also, for many average-sized homes looking to install an air source heat pump, the Boiler Upgrade Scheme could be a stronger incentive than the RHI. You benefit from an upfront saving of £5,000, rather than receiving a similar amount spread out over a seven-year period. It’s an instant saving that homeowners can benefit from immediately, making renewable heating much more accessible.
By contrast, for larger properties, and those looking to install a ground source heat pump, the return is likely to have been better with the RHI over time. Yet, for many, the idea of an upfront lump sum offered by the 2022 Boiler Upgrade Scheme is more appealing.
Besides the financial incentive offered by the Boiler Upgrade Scheme, switching your fossil fuel boiler out for an air or ground source heat pump has a whole range of benefits.
The largest benefit is the positive impact on the environment. Ground and air source heat pumps are a low carbon source of heat. They utilise electricity, rather than fossil fuels, to efficiently heat a home. By replacing an oil boiler with an air source heat pump, you could save 4500kg of carbon each year – the equivalent of planting 180 trees, or 7 flights from London to New York!
Another benefit is their efficiency. When designed and installed properly, heat pumps are incredibly efficient – while a boiler is only 90% efficient, a heat pump is as much as 400% efficient.
And, they’re brilliantly low maintenance once installed. While a gas boiler tends to need replacing roughly every ten years, the lifespan of a ground source heat pump is generally 20-30 years.