Boiler Upgrade Scheme: £7,500 and £9,000 Grants

The Boiler Upgrade Scheme gives property owners in England and Wales £7,500 towards an air source or ground source heat pump, or £9,000 if the home is off the gas grid and heated by oil or LPG (until 31 March 2027). It also offers £2,500 towards an air-to-air heat pump and £5,000 towards a biomass boiler. This guide explains who qualifies, what a heat pump costs after the grant, and how your installer applies.

What is the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme (BUS) is a government scheme that helps property owners in England and Wales replace fossil fuel heating with low-carbon heating. It has been extended to run to 2030, with a budget of £2.7 billion. By the end of July 2026, 90,115 grants had been paid.

Unlike means-tested schemes such as ECO4, there is no income test. Since 28 April 2026 your property no longer needs an EPC either. The rules relate to the property, the heating you're replacing and the installer.

Grant Amounts by Technology

Air Source Heat Pumps (air-to-water): £7,500
Ground Source Heat Pumps (including water source): £7,500
Off-gas-grid homes heated by oil or LPG: £9,000 for an air source or ground source heat pump, until 31 March 2027
Air-to-Air Heat Pumps: £2,500 (homes only, from 28 April 2026)
Biomass Boilers: £5,000 (off-gas-grid, rural properties only)

You can get one grant per property. Hybrid heat pump systems (a heat pump working alongside a gas or oil boiler) are not eligible. Heat batteries are not funded yet: a £2,500 grant is planned once the legislation and product standards are in place.

Who Qualifies for the Grant?

Eligibility depends on your property and the heating system being replaced, not your income or benefits.

Property Eligibility

Location: England or Wales. In Scotland, Home Energy Scotland offers up to £7,500 grant plus an optional £7,500 interest-free loan for heat pumps
Ownership: You must own the property, including a second home, business premises or a home you let to tenants
Existing heating: Must be replacing a fossil fuel heating system, such as oil, gas, LPG or electric
EPC: No longer required
Installer: Must be MCS certified, and must install and commission the heat pump within 120 days of applying

No EPC Needed Any More

The Boiler Upgrade Scheme (England and Wales) (Amendment) Regulations 2026, in force from 28 April 2026, removed the requirement for a property to have a valid energy performance certificate.

Insulation still matters, because a heat pump works best in a home that holds its heat. If you have already had funding to insulate your home, you can still apply for BUS. If you're on a lower income, ECO4 or the Warm Homes: Local Grant may help with insulation. The Great British Insulation Scheme closed on 31 March 2026.

What You Can't Do

The scheme has important restrictions:

Most new-build properties are not eligible (though if you move into a finished new build with a fossil fuel boiler, you may be able to get a grant)
Social housing is not eligible
A property that has already had government funding or support for a heat pump or biomass boiler cannot get a grant
Hybrid heat pump systems are not eligible
Self-build homes can qualify for a heat pump, but not for a biomass boiler
One grant per property

What Heat Pumps Qualify?

The system must be installed by an MCS-certified installer, and an individual system can be up to 45kWth.

Air Source Heat Pumps (ASHP)

ASHPs extract heat from outdoor air and usually cost less to install than ground source systems. To qualify:

Installed by an MCS-certified installer
Air-to-water systems (feeding radiators and hot water) get £7,500, or £9,000 in eligible off-gas-grid homes
Air-to-air systems get £2,500, for residential properties only
Replacing fossil fuel heating, not an existing heat pump

The Energy Saving Trust says a heat pump produces around three units of heat for every unit of electricity it uses, and Which? says heat pump seasonal efficiency (SCOP) in the UK is generally around 3.0.

Ground Source Heat Pumps (GSHP)

GSHPs extract heat from the ground using buried pipes or boreholes. They need suitable outdoor space and cost more to install:

Must be installed by an MCS-certified installer
Requires suitable land for a ground loop, or a borehole
Grant of £7,500, or £9,000 in eligible off-gas-grid homes until 31 March 2027
The Energy Saving Trust puts a trench system at around £15,000 (boreholes cost considerably more); the median BUS ground source install was £27,232 in April to June 2026, including the grant

Ground source systems can suit properties with large gardens or land; for many homes an air source system is the more affordable option.

The MCS Certification Requirement

MCS certification is non-negotiable for BUS funding. It means:

The installer is certified for the technology they install
The installation follows MCS standards
The installer can apply for the grant through Ofgem

Always check your installer on the MCS find an installer search before you sign, and ask what warranty and aftercare come with the system.

How Much Will You Pay After the Grant?

Since 28 April 2026, installers must take the grant off the upfront price, so your quote should show it deducted.

Air Source Heat Pump Costs After Grant

Typical Installation Costs (Air Source)

Median BUS install (April to June 2026): £12,908 before the grant; around £5,400 after £7,500, or around £3,900 after £9,000
Middle half of installs: £11,128 to £15,627 before the grant; roughly £3,600 to £8,100 after £7,500
Energy Saving Trust typical cost: around £12,000 before the grant

Typical costs, last reviewed September 2026. Sources: DESNZ Boiler Upgrade Scheme statistics, July 2026 (England and Wales), and Energy Saving Trust. After-grant figures are simple subtraction.

Installation complexity depends on:

Whether existing radiators need upgrading (larger radiators work better with heat pumps)
Hot water cylinder installation (if you currently have a combi boiler)
Any electrical upgrades needed
Pipework modifications
Outdoor unit placement challenges

Comparing to Gas Boiler Costs

A Checkatrade cost guide (March 2026) puts a like-for-like combi boiler replacement at usually £2,500 to £4,000 supplied and fitted. Even after a £7,500 grant, a typical air source heat pump costs more upfront, and running costs depend heavily on your tariff and home (see below).

How to Apply for the Boiler Upgrade Scheme

Your MCS-certified installer applies for the grant through Ofgem. You don't apply directly as a property owner.

Step-by-Step Application Process

Check Your Property Qualifies: You own it, it's in England or Wales, you're replacing fossil fuel heating, and it hasn't already had government funding for a heat pump.
Find an MCS-Certified Installer: Use the MCS search, or send an enquiry through our quote service; we pass it to Better Home Hub, which may introduce installers. Check their MCS certification yourself.
Home Survey: The installer conducts a detailed survey to assess your property's suitability, heat loss and system sizing.
Receive Quote: You'll receive a quote showing the total cost with the grant taken off.
Installer Applies for Grant: Once you accept the quote, the installer applies for the grant through Ofgem.
Installation: The installer must install and commission the heat pump within 120 days of applying, or it will not be eligible.
Grant Payment: The installer redeems the grant through Ofgem after installation, and you pay the reduced price.

Timing

No set timescale: it depends on the survey and the installer's availability
120-day limit: installation and commissioning must happen within 120 days of the application
Off-gas-grid rate: the £9,000 grant is available until 31 March 2027

Running Costs: Heat Pump vs Gas Boiler

The financial case for heat pumps depends heavily on your home, your old heating system and your tariff. Our heat pump vs gas boiler cost comparison goes further; below are Energy Saving Trust estimates for an air source heat pump in a three-bedroom semi-detached home with radiator upgrades as needed (July 2026 prices).

Replacing a Gas Boiler

Yearly difference, from replacing the least efficient to the most efficient old boiler:

Heat pump on a standard tariff: from around £220 saved to around £110 more a year
Standard tariff, no gas standing charge: from around £330 to around £4 saved
Heat pump tariff, no gas standing charge: from around £530 to around £204 saved
Outcome: On a standard tariff a heat pump can cost slightly more to run than a new gas boiler; the tariff makes a big difference

Replacing Oil, LPG or Electric Heating

LPG boiler, standard tariff: around £290 to £780 saved a year
Oil boiler: from around £260 saved to around £90 more on a standard tariff; around £110 to £460 saved on a heat pump tariff
Electric storage heaters: around £800 to £1,200 saved on a standard tariff (£1,000 to £1,400 on a heat pump tariff)
Outcome: The biggest savings are likeliest when replacing LPG or electric heating

Heat Pump Electricity Tariffs

Some suppliers offer tariffs designed for heat pumps or with cheaper off-peak rates. Compare them before you switch; the figures above show how much the tariff changes the result. For reference, the Ofgem price cap from 1 October to 31 December 2026 is 26.32p per kWh for electricity (VAT has been removed from electricity until 31 March 2027) and 7.97p per kWh for gas.

Combining BUS with Other Grants

You can't get BUS for a property that has already had government funding for a heat pump, but earlier insulation funding doesn't stop you applying.

Compatible Grant Combinations

ECO4 insulation + BUS heat pump: If you're eligible, insulate through ECO4 (which ends on 31 December 2026), then apply for BUS
Warm Homes: Local Grant: In England it can fund insulation for eligible lower-income households; if it funds a heat pump, you can't also get BUS for that property
0% VAT + BUS: Installed heat pumps and solar panels have 0% VAT until 31 March 2027

A Sensible Order of Work

Improve insulation where needed (ECO4 or the Warm Homes: Local Grant may help if you're eligible)
Get a heat loss survey from an MCS-certified installer
Apply for BUS through your installer (£9,000 if you're off the gas grid on oil or LPG, until 31 March 2027)
Consider solar panels to generate some of the electricity the heat pump uses

What you can get depends on your eligibility for each scheme.

Common Questions and Concerns

Will a heat pump keep my house warm enough?

Yes, when properly sized and installed. The key is a correct heat loss calculation and proper system design by your MCS installer.

Are heat pumps noisy?

Air source heat pumps have a fan and compressor, so they make some noise. In England, installations under permitted development must meet the MCS 020(a) noise standard. Positioning the unit away from bedrooms and neighbours helps.

Do I need planning permission?

In England, air source heat pumps can often be installed under permitted development. Since 29 May 2025 the rule requiring a 1 metre gap from the boundary has gone, the size limit has risen to 1.5 cubic metres, and detached houses can have up to two. Listed buildings and other conditions still apply. Wales, Scotland and Northern Ireland have their own rules, so ask your installer to check.

What about hot water?

Heat pumps usually provide hot water through a storage cylinder, so if you have a combi boiler you'll need space for one. Your installer should size it for your household.

How long do heat pumps last?

Lifespan depends on the product, the installation and maintenance. Ask your installer what warranty comes with the system, and what servicing it needs to stay valid.

Will the grant run out?

BUS runs to 2030 with a budget of £2.7 billion. The £9,000 off-gas-grid rate is only available until 31 March 2027. Amounts and rules can change, so check GOV.UK before you commit.

The Environmental Case for Heat Pumps

Heat pumps run on electricity instead of burning fossil fuels at home. The Energy Saving Trust says heat pumps are more than three times more efficient than a gas or oil boiler.

Carbon Emissions Reduction

The Energy Saving Trust estimates a ground source heat pump replacing a gas boiler in a well-insulated four-bedroom detached home saves around 3,500 to 5,200 kg of CO2 a year
In the same home, replacing an oil boiler saves around 5,300 to 7,800 kg a year
As more electricity comes from low-carbon sources, the emissions from running a heat pump fall

Property Future-Proofing

There is no ban on replacing a gas boiler in an existing home. New homes in England built to the Future Homes Standard (from 24 March 2027) will need low-carbon heating. If you let a property, the government has confirmed plans for all private tenancies in England and Wales to meet a higher EPC C standard by 1 October 2030.

Is the Boiler Upgrade Scheme Right for You?

The grant makes heat pumps more affordable, but they're not suitable for every property right now. Consider a heat pump if:

Your home holds its heat reasonably well, or you plan to improve insulation
You're replacing gas, oil, LPG or electric heating
You plan to stay in the property for a while
You value environmental impact alongside finances
You have space for an outdoor unit and, usually, a hot water cylinder

Consider improving insulation first if:

Your EPC recommends loft or cavity wall insulation
Your property is rated E, F, or G
You have single-glazed windows
You notice significant draughts or cold spots

If you're eligible, ECO4 (until 31 December 2026) or the Warm Homes: Local Grant in England may help with insulation, which helps a heat pump run efficiently.

Next Steps

The Boiler Upgrade Scheme offers £7,500 towards a heat pump, or £9,000 for eligible off-gas-grid homes until 31 March 2027, and runs to 2030.

Whether you're ready now or need to improve insulation first, get a survey from an MCS-certified installer and compare running costs on the tariff you would use.