Boiler Upgrade Scheme 2026: Full UK Guide To £7,500 Heat Pump Grants

The Boiler Upgrade Scheme is a government grant designed to help homeowners switch from gas and oil boilers to low-carbon heating systems. It runs until 2028, with 150,000 grants available in 2026 on a first-come, first-served basis. Grant amounts: £7,500 for air source heat pumps (the most common type for UK homes), £7,500 for ground source heat pumps, and £5,000 for biomass boilers (for off-gas properties only). The grant is deducted directly from your installation bill — you never have to pay the full amount upfront and claim it back later.

To qualify for the Boiler Upgrade Scheme grant, you must meet all of the following criteria: 1) Property location: Your property is in England, Wales, or Scotland (Northern Ireland has a separate scheme). 2) Ownership: You own the property, or you are a tenant with written permission from your landlord. 3) Existing heating system: Your current boiler is a gas, oil, or LPG boiler that is at least 5 years old. 4) EPC rating: Your property has an Energy Performance Certificate (EPC) rating of D, E, F, or G, and no outstanding recommendations for cavity wall or loft insulation. 5) Installation requirements: Your heat pump must be installed by an MCS certified installer (see our MCS certification guide). 6) Previous grants: You have not received a Boiler Upgrade Scheme grant for the same property in the past. Scottish homeowners can get an additional £1,000–£2,500 on top of the standard £7,500 BUS grant through the Home Energy Scotland Heat Pump Grant scheme, bringing total grants up to £10,000 for low-income households (household income under £30,000 per year or receiving qualifying benefits).

The application process is handled entirely by your installer — you don't need to fill in any government forms yourself. Step 1: Check your EPC rating for free on the UK EPC register. Step 2: Get quotes from MCS certified installers — all installers must be MCS certified to apply for BUS grants on your behalf. Step 3: Your chosen installer submits the grant application to Ofgem on your behalf, usually within 7 days. Step 4: Ofgem approves most applications within 2 weeks and confirms the grant amount with you and your installer. Step 5: Installation goes ahead, and the grant amount is deducted directly from your final bill so you only pay the remaining cost. Step 6: After installation, you'll receive an MCS certificate, which you need to claim other incentives like SEG payments and 0% VAT.

The Boiler Upgrade Scheme can be combined with other grants and discounts to reduce your costs even further. 0% VAT on energy saving materials: All heat pump installations by MCS certified installers qualify for 0% VAT until March 2027, saving you an extra 20% on the remaining cost after the BUS grant is applied. For example, a £12,000 air source heat pump installation: BUS grant -£7,500 leaves £4,500 remaining; 0% VAT saves -£900, for a final cost of £3,600. Smart Export Guarantee (SEG) payments: If you install solar panels with your heat pump, you can earn £150–£400 per year in SEG payments for excess electricity you export to the grid, covering your remaining costs over 8–10 years. ECO4 Grants: Low income and vulnerable households can get additional grants through the ECO4 scheme to cover the remaining cost of installation, making heat pumps completely free for eligible households.

Thanks to the £7,500 BUS grant, the cost of installing a heat pump is now equivalent to replacing a standard gas boiler. A gas boiler replacement costs £3,000–£5,000 (no grants available). An air source heat pump costs £8,000–£14,000 total, or £0–£6,500 after BUS grant + 0% VAT. A ground source heat pump costs £15,000–£25,000 total, or £6,000–£14,000 after BUS grant + 0% VAT. Even without additional grants, the average air source heat pump installation costs £3,600 after BUS and 0% VAT — within the standard cost range for replacing a gas boiler.

1) Using a non-MCS certified installer: You will lose the BUS grant, 0% VAT discount, and SEG eligibility if your installer is not MCS certified. 2) Not checking your EPC rating first: You cannot get the grant if your property has an EPC rating of C or above, unless you carry out the recommended insulation works first. 3) Waiting too long to apply: Grants are allocated on a first-come, first-served basis, and 40% of 2026 grants were already claimed by the end of May. 4) Assuming you can't afford a heat pump: For 60% of UK households, the cost after grants is the same or cheaper than replacing a gas boiler. 5) Forgetting about running costs: Heat pumps have 3x lower running costs than gas boilers, saving you £300–£600 per year on energy bills.

If your BUS grant application is rejected, you can appeal within 28 days. Common reasons for rejection include: EPC rating too high, installer not MCS-certified, or missing documentation. Contact Ofgem directly at bus@ofgem.gov.uk for guidance on the appeals process.