Boiler Upgrade Scheme 2026: Complete Application Guide

It's not means-tested. You don't need to be on benefits. You just need to own a property in England or Wales and be replacing a fossil fuel heating system. The whole process takes 6–12 weeks. The budget isn't running out. The main bottleneck is finding a good installer, not the money.

Changed in 2024–2025: The mandatory loft/cavity wall insulation rule was scrapped in May 2024. Air-to-air heat pumps were added in November 2025 at £2,500. You no longer need to fix insulation recommendations on your EPC before applying.

BUS by the Numbers

The Boiler Upgrade Scheme has been running since May 2022. Here's where it stands as of February 2026, based on Ofgem's published data:

Year 3 (April 2024–March 2025) saw a big jump: £188.8 million paid out, up from £88.4 million the year before. Uptake is growing but the budget isn't close to running out. The scheme was extended to March 2030 in April 2026, with funding committed each year, and a further extension or replacement scheme is plausible.

What the Scheme Covers

The ASHP and GSHP grants were increased from £5,000 and £6,000 respectively to £7,500 in October 2023. Air-to-air heat pumps were added in November 2025. They're cheaper to install (around £4,500 typically) but don't heat water, so they're best suited to well-insulated properties with an existing immersion heater or separate water heating.

The scheme does not cover hybrid systems (gas boiler + heat pump combo), solar panels, battery storage, or district heating. For solar, see our solar panel costs guide. Solar panels carry 0% VAT instead of a direct grant.

Check If You Qualify

Use our eligibility checker to see which grants you might qualify for. It covers BUS plus five other UK energy schemes:

Eligibility: The Full Details

BUS has a much shorter eligibility checklist than means-tested schemes like ECO4. Here's what you need:

You Must

• Own the property, including second homes, buy-to-lets, and small business premises
• Be in England or Wales. Scotland has Home Energy Scotland (£7,500 grant, rising to £9,000 with rural uplift, plus an optional interest-free loan up to £7,500). Northern Ireland has no equivalent scheme.
• Be replacing fossil fuel heating: gas, oil, LPG, or electric storage/panel heaters all count. You can't use BUS to replace an existing heat pump.
• Have a valid EPC, issued within the last 10 years. An EPC costs £60–£120 and takes about an hour. Check yours at gov.uk/find-energy-certificate.

You Can't Apply If

• Your property is a new build (most are excluded; see the FAQ below for exceptions)
• It's social housing
• You've already received government funding for a heat pump or biomass boiler at this property

Insulation Requirements: The Rule That No Longer Exists

Before May 2024, your EPC couldn't have outstanding recommendations for loft or cavity wall insulation, which blocked thousands of applications. This rule was scrapped on 8 May 2024. You no longer need to address insulation recommendations before applying.

That said, insulation still matters practically. A heat pump works most efficiently in a well-insulated home, and you'll pay less to run it. If your EPC shows poor insulation, strongly consider fixing that first, especially if you'd qualify for free insulation through ECO4 or the Great British Insulation Scheme. It's just no longer a BUS eligibility requirement.

Biomass Boiler: Extra Requirements

Biomass boilers have tighter rules than heat pumps. You must be off the gas grid, in a rural location, and the boiler must have an emissions certificate. Self-build properties aren't eligible for biomass. Most people applying under BUS are going for heat pumps; biomass is the niche exception.

What You'll Actually Pay

Everyone wants to know the bottom line. Here's what a typical air source heat pump installation costs before and after the grant:

Want a more detailed estimate? Use our calculator. Pick your technology, home size, and any extras to see a personalised ballpark:

Three Real Cost Examples

These are representative scenarios based on typical 2025/26 installer quotes:

The 2-bed terrace scenario isn't unusual: for smaller properties with straightforward installations, the £7,500 grant can genuinely cover the entire cost. That's why the scheme exists.

The Application Process: Step by Step

Here's the full journey from start to finish. Most households complete it in 6–12 weeks.

How the Grant Payment Works

This confuses a lot of people, so let's be completely clear:

• You do not receive £7,500 in your bank account
• Your installer deducts the grant from your invoice before presenting it to you
• You pay the installer only the balance
• Ofgem reimburses the installer directly

Example: installer quotes £11,000. Your invoice shows £11,000 minus £7,500 BUS grant = £3,500 to pay. You pay £3,500. Ofgem sends £7,500 to the installer. No cash advance from you, no rebate to wait for, no forms for you to fill in.

Common Rejection Reasons (and How to Avoid Them)

Ofgem rejects a small but real proportion of applications. Here's what goes wrong and how to prevent it:

If rejected, Ofgem explains why. Most issues are correctable: get a new EPC, fix the error, and your installer can reapply.

Budget and Availability: Is the Money Running Out?

No. The 2025/26 budget is £295 million. Year 3 spent £188.8 million and Year 4 is tracking well within budget. Uptake has never come close to exhausting available funds in any quarter.

The scheme is confirmed to run until at least March 2030, extended in April 2026 from a previous March 2028 end date. The risk of grant amounts changing is real (they've changed before), but the risk of running out of money before you can apply is low.

The real constraint isn't funding. It's installer availability. The best MCS installers in many areas have 4–8 week waiting lists. Starting sooner rather than later is about getting a good installer, not beating a funding deadline.

BUS vs Other Grants: Which Should You Use?

BUS isn't the only game in town. Here's how it compares to the other main schemes:

The smart strategy: If you're on qualifying benefits, check ECO4 first, as it may fund the entire heat pump installation. If you're not on benefits, BUS is your main route. Either way, check GBIS for free insulation before or alongside. Welsh and Scottish homeowners have their own parallel schemes that may be more generous.

Combining BUS with Other Support

You can't double-fund the heat pump itself, but you can stack BUS with other forms of support:

• ECO4 or GBIS for insulation: get free insulation first, then apply BUS for the heat pump. This is the most efficient sequence.
• 0% VAT: heat pump installations carry 0% VAT automatically (since February 2024). Already factored into quotes.
• Mortgage lender cashback: Halifax, Lloyds, Barclays, and others offer £1,000–£2,000 cashback for energy-efficient home improvements. Check with your lender.
• Smart Export Guarantee: if you add solar panels, you can earn money exporting excess electricity. BUS and SEG are fully compatible. See our solar panel costs guide.
• Heat pump electricity tariffs: tariffs like Octopus Cosy offer cheaper off-peak rates for heat pump owners. You'll need your MCS certificate to register.

Home Upgrade Grant (HUG2): England

HUG2 is administered by local councils and covers low-income households off the gas grid. It can fund both insulation and a heat pump, sometimes covering more than BUS. If you're off grid and on a low income, check HUG2 before applying for BUS. Contact your local council or the Energy Saving Trust to compare.

After Installation: What to Do Next

Your heat pump is in. Now what? Most guides stop here, but the first few weeks matter:

Optimise Your Settings

Heat pumps run at lower flow temperatures than gas boilers (45–55°C vs 70–80°C). Your installer should set this during commissioning, but check it hasn't been bumped up. Lower flow temperatures = higher efficiency = lower bills. If your house feels cold, add heating time rather than increasing the temperature, as heat pumps work best running for longer at a lower output.

Register for a Heat Pump Tariff

You're now eligible for time-of-use electricity tariffs designed for heat pump owners. Octopus Cosy, for example, offers cheaper rates during off-peak hours. You'll need your MCS certificate to register. This can cut your running costs by 15–25% compared to a standard variable tariff.

Consider Solar Panels

A heat pump + solar panel combination is the most efficient setup for a UK home. Solar generates electricity during the day, your heat pump uses it, and you export any surplus via the Smart Export Guarantee. See our solar panel costs guide and solar + heat pump combo guide for details.

Monitor Your Energy Use

Install a home energy monitor or use your smart meter's in-home display to track consumption. Many heat pump owners find their system runs efficiently for the first winter but could be further optimised. Monitoring helps you spot issues early, such as the heat pump running at times it shouldn't, or the backup immersion heater switching on unnecessarily.

Keep Your MCS Certificate Safe

You'll need it for heat pump tariff registration, for any future insurance claims, and potentially for adding value to your home when selling. It's proof your installation meets required standards.

Is the Boiler Upgrade Scheme Worth It?

Honest answer: for most homeowners replacing a gas boiler, yes. Especially in 2026.

Here's the maths for a typical 3-bed semi switching from gas to an air source heat pump:

The payback depends heavily on what you pay out of pocket. At the low end (£1,000 net cost), you're in profit within 3–5 years. At the high end (£4,500), it takes longer, but you're also getting a heating system that should last 20+ years, doesn't burn fossil fuels, and will only get cheaper to run as electricity prices fall relative to gas.

For oil and LPG users, the case is even stronger: oil heating typically costs £1,200–£1,800 per year, so the annual saving is much larger and payback is faster.

Where it's less clear-cut: If your gas boiler is relatively new (under 5 years old) and your property is poorly insulated, the upfront cost may not make financial sense yet. In that case, prioritise insulation now and plan for a heat pump when your boiler reaches end of life.

Next Steps

1. Check your EPC at gov.uk/find-energy-certificate; if it's expired or missing, book an assessment first (£60–£120)
2. Check for free insulation: see if you qualify for ECO4 or GBIS before spending anything on insulation
3. Get 3 MCS installer quotes: check credentials at mcscertified.com, and always ask for the heat loss calculation
4. Compare quotes carefully: the cheapest isn't always the best. Look at the specification, not just the price
5. Confirm BUS handling: make sure your chosen installer will submit the Ofgem application on your behalf
6. Model your savings: use our heat pump savings calculator to estimate running costs and payback

For the full context on heat pump installation (costs, what to expect, and how to choose a system), see our air source heat pump costs guide. For the bigger picture on making your home energy-efficient, start with our complete home energy efficiency guide.