Boiler Upgrade Scheme

What is the Boiler Upgrade Scheme?

The UK Government launched the Boiler Upgrade Scheme (BUS) as an initiative to support the decarbonisation of heating systems in homes and small non-domestic buildings in England and Wales. Starting on April 1, 2022, the scheme offers upfront capital grants that encourage property owners to replace fossil fuel heating systems with low-carbon alternatives, such as heat pumps and biomass boilers. Initially funded with £450 million, the scheme has seen multiple budget expansions due to high demand and has received extended funding until 2028 as part of the “Powering Up Britain” plan.

The scheme actively seeks to reduce carbon emissions and contribute to the UK’s net-zero targets by 2050. Ofgem administers the scheme, overseeing voucher applications, payments to installers, and compliance monitoring.

The Boiler Upgrade Scheme provides substantial financial support to help offset the initial costs of installing low-carbon heating systems. The grant amounts are fixed and depend on the type of technology being installed:

1. Air Source Heat Pumps: £7,500

   • This covers a significant portion of the installation cost, which typically ranges from £7,000 to £13,000.

   • Air source heat pumps extract heat from the outside air and are suitable for most properties.

2. Ground Source Heat Pumps: £7,500

   • Installation costs for ground source heat pumps can range from £14,000 to £30,000, making this grant particularly valuable.

   • This category also includes water source heat pumps.

   • Ground source heat pumps extract heat from the ground and are highly efficient but require more space for installation.

3. Biomass Boilers: £5,000

   • Biomass boiler installations typically cost between £5,000 and £13,000.

   • These are only eligible in rural areas and properties not connected to the gas grid.

It’s important to note that these grants are provided upfront and deducted from the total installation cost. The property owner is responsible for paying the remaining balance to the installer. The grant amounts are fixed and do not vary based on the total cost of installation or the size of the property.

The Boiler Upgrade Scheme (BUS) is designed to help property owners in England and Wales transition to low-carbon heating systems. However, not every property or heating system qualifies for the scheme.

1. Property Requirements

To qualify for the scheme, your property must meet specific requirements:

• Location: The property must be located in England or Wales. The scheme does not apply to properties in Scotland or Northern Ireland.

• Type of Property: Eligible properties include:

  • Residential homes (primary residences, second homes, or rental properties)

  • Small non-domestic buildings, such as small businesses

• System Capacity: The heating system being installed must have a capacity of up to 45kWth, which is suitable for most residential and small non-domestic buildings. For shared ground loop systems (used by multiple properties), the capacity can go up to 300kWth.

• Energy Performance Certificate (EPC):

  • The property must have a valid EPC at the time of application.

  • If the EPC includes recommendations for loft or cavity wall insulation, these must be addressed before applying unless exempt (e.g., if insulation is not feasible due to structural issues).

• Exclusions:

  • Social housing is not eligible for the scheme.

  • Most new-build properties are excluded unless they are self-builds (see below for self-build eligibility).

2. Heating System Requirements

The scheme supports replacing existing fossil fuel heating systems with low-carbon alternatives. Specific requirements include:

• Existing Heating System: The scheme is only available for replacing fossil fuel heating systems such as:

  • Oil boilers

  • Gas boilers

  • Electric heating systems

  • LPG (liquefied petroleum gas) systems

• Eligible Low-Carbon Systems:

  • Air source heat pumps

  • Ground source heat pumps (including water source heat pumps)

  • Biomass boilers (subject to additional criteria below)

• Biomass Boilers Specific Criteria:

  • Biomass boilers are eligible only for properties located in rural areas and that are off the gas grid.

  • The biomass boiler must have an emissions certificate demonstrating compliance with air quality standards and minimal pollution.

3. Ownership and Installation Requirements

The scheme requires applicants to own the property and work with certified professionals:

• Property Ownership: You must own the property where the installation will take place. This includes:

  • Homeowners

  • Landlords

  • Owners of second homes

  • Small business owners

• Installer Certification: The installation must be carried out by an installer certified under the Microgeneration Certification Scheme (MCS). This ensures that the work meets high standards of quality and compliance.

• Installation Timeline: Once a grant application is approved, the installer has up to 120 days to commission and complete the installation.

4. Self-Build Properties

Self-build properties are eligible under specific conditions:

• The property must be constructed by you or a builder hired directly by you.

• It cannot have been owned or developed by a business or organization.

• Proof of self-build status may be required during the application process.

5. Restrictions on Funding

The Boiler Upgrade Scheme has strict rules regarding funding:

• You cannot receive funding from multiple public sources for the same heating system installation. For example:

  • If you are already receiving grants under another government program for renewable heating, you cannot apply for BUS funding for that same system.

• You can still apply if you’ve received other energy efficiency funding in the past (e.g., insulation grants), provided it does not overlap with this installation.

To apply for the Boiler Upgrade Scheme (BUS), follow these steps:

1. Check eligibility: Ensure you own the property and are replacing a fossil fuel heating system (oil, gas, electric, or LPG) with an eligible low-carbon alternative.

2. Find an MCS-certified installer: Contact certified installers to assess your property and provide quotes for suitable low-carbon heating systems.

3. Choose an installer: Select an installer and agree on the installation details and costs.

4. Installer applies for the grant: Your chosen installer will apply for the BUS grant on your behalf through Ofgem’s portal.

5. Consent to the application: You’ll receive an email from Ofgem to confirm your consent for the installer to apply for the grant on your behalf.

6. Grant approval: Ofgem reviews the application and issues a voucher to the installer if approved.

7. Installation: Once approved, the installer completes the installation within 120 days of the grant application.

8. Payment: You pay the installer the agreed amount minus the grant value.

Free Heating UK can assist in this process by:

1. Helping you apply for funding online through their application form.

2. Checking your eligibility for the scheme.

3. Applying for the grant on your behalf if you’re eligible.

4. Providing access to their network of installers across the UK to ensure competitive installation prices.

By working with Free Heating UK, you can simplify the application process and potentially save money on your boiler upgrade