The Boiler Upgrade Scheme gives homeowners and small landlords up to £7,500 off the cost of installing a heat pump or biomass boiler in place of a fossil fuel heating system. This guide explains eligibility, how to apply through an MCS-certified installer, and how the grant interacts with VAT relief.
What the Scheme Is
The Boiler Upgrade Scheme is a government grant, administered by Ofgem, available in England and Wales to help homeowners and small landlords cover the cost of installing an air source heat pump, ground source heat pump, or biomass boiler in place of a fossil fuel heating system, supporting the wider move towards low-carbon home heating.
How Much the Grant Is Worth
The grant is worth up to £7,500 towards an air source or ground source heat pump installation. Grant levels and eligible technologies can be reviewed and updated by government, so checking the current figure on gov.uk before committing to an installation and getting quotes is the reliable way to confirm what applies right now.
How to Apply
You do not apply for the grant yourself. Your MCS-certified installer applies to Ofgem on your behalf as part of arranging the installation, and the grant amount is deducted from your final invoice, meaning the benefit appears as a lower price rather than a separate payment to you after the work is done.
Eligibility Criteria
Eligibility generally requires replacing an existing fossil fuel heating system, and the property typically needs a reasonable standard of insulation for a heat pump to work effectively, which is usually assessed as part of the installer's quotation process. Small landlords can generally apply on behalf of a let property alongside owner-occupiers, though a cap on the number of properties one landlord can claim for may apply.
VAT Relief on Installation
Separately from the Boiler Upgrade Scheme grant, installations of qualifying energy-saving materials including heat pumps generally benefit from the 0% reduced VAT rate on installation in residential accommodation, rather than the standard 20% rate, which further reduces the overall cost alongside the grant itself.
Frequently Asked Questions
What is the Boiler Upgrade Scheme?
The Boiler Upgrade Scheme (BUS) is a government grant available in England and Wales that gives homeowners and small landlords money off the cost of installing an air source heat pump, ground source heat pump, or biomass boiler in place of a fossil fuel heating system, aiming to make low-carbon heating more affordable.
How much is the grant worth?
The grant is worth up to £7,500 towards an air source or ground source heat pump installation. The exact amount and which technologies qualify can be updated by government, so checking the current gov.uk Boiler Upgrade Scheme page for the live figure before committing to an installation is essential.
Do I apply for the grant myself?
No -- you do not apply for the grant directly. Your MCS-certified installer applies to Ofgem on your behalf as part of quoting for and arranging the installation, and the grant amount is deducted from your final invoice, so you never handle the grant application paperwork yourself.
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Do I need to replace a fossil fuel boiler to qualify?
You generally need to be replacing an existing fossil fuel heating system (such as a gas, oil, or LPG boiler, or in some cases electric storage heaters) with the low-carbon system, rather than installing a heat pump as a first heating system in a home that had none, though exact eligibility criteria should be checked against current scheme rules.
Does my home need adequate insulation to qualify for the grant?
Heat pumps work most effectively in reasonably well-insulated homes, so an assessment of the property's insulation and heat loss is a normal part of the installer's quotation process, though the specific insulation requirements attached to grant eligibility have evolved over time and should be confirmed with your chosen MCS-certified installer.
Can landlords apply for the Boiler Upgrade Scheme grant?
Yes -- small landlords with a small number of let properties can generally apply for the grant on behalf of their tenants' homes, alongside owner-occupiers, though there may be a cap on the number of properties one landlord can claim for under the scheme in a given period.
Is VAT charged on a heat pump installation?
Installations of qualifying energy-saving materials, including heat pumps, generally benefit from the 0% reduced VAT rate on installation in residential accommodation, meaning the labour and materials cost is not subject to the standard 20% VAT rate, separately from and in addition to the Boiler Upgrade Scheme grant.
Can I combine the Boiler Upgrade Scheme grant with other funding?
This depends on the specific rules of any other scheme you are considering, since some grants and finance products are designed to be stacked with the Boiler Upgrade Scheme while others may exclude properties that have already received it -- checking with your installer and the relevant scheme administrator before assuming grants can be combined is important.
How long does it take to receive the grant benefit?
Because the grant is applied for by the installer and deducted from your invoice rather than paid to you directly, you generally see the benefit as a reduced price on your final bill once the installation is complete and the installer's application has been processed by Ofgem, rather than receiving a separate cash payment afterwards.
Where can I check the current grant amount and eligibility rules?
The Boiler Upgrade Scheme is administered by Ofgem on behalf of the government, and the current grant amount, eligible technologies, and eligibility criteria are published on gov.uk -- checking there before getting quotes is the best way to confirm the scheme has not changed since this guide was last updated.
Disclaimer: This guide reflects the Boiler Upgrade Scheme as understood for 2026/27; grant amounts and eligible technologies are set by government and can change. This guide is for general information only and is not professional advice. Consult a qualified MCS-certified installer and refer to gov.uk for current official guidance before relying on any treatment.
