Boiler Upgrade Scheme Explained — When Can I Get the £7,500?

The Boiler Upgrade Scheme (BUS) launched in May 2022 with grants of £5,000 for an air-source heat pump (ASHP), £6,000 for a ground-source heat pump (GSHP) and £5,000 for a biomass boiler. The original budget ran to March 2025 with a target of 90,000 installs — actual uptake fell well short for the first two years.

In October 2023 the grant was uplifted to £7,500 for ASHP and £7,500 for GSHP. The biomass grant was held at £5,000. The uplift was a direct response to the slow uptake and the spring 2024 spending review extended the funding pot to March 2028.

In November 2024 the EPC requirement was scrapped. Previously, a property needed an EPC dated within the last 10 years with no outstanding loft or cavity wall insulation recommendations. The 2024 change removed all EPC pre-conditions — any eligible property can apply regardless of EPC rating or insulation status.

In 2026 the grant continues at £7,500 for ASHP and GSHP, £5,000 for biomass, with no EPC pre-condition and an active funding pot through to 2028. The 2024 changes have driven application volumes up materially — quarterly application volumes through 2026 are roughly triple the 2023 levels.

The property must be in England or Wales (Scotland has a separate Home Energy Scotland scheme). It must be a single property — owner-occupied, private rental, or second home all qualify. New-build properties do not qualify unless the property is a self-build.

The installation must be MCS-certified — both the installer and the heat pump model must hold current MCS certification. The MCS installer applies for the grant on your behalf; you cannot self-apply for BUS. This routes accountability and quality through the MCS framework.

The new heat pump must replace a fossil-fuel heating system — gas, oil, coal or LPG. Replacing an existing electric heating system (storage heaters, panel heaters, direct electric boiler) does NOT qualify. This is a frequent surprise for landlords with all-electric flats — the grant is structurally aimed at reducing fossil-fuel emissions, not at upgrading existing electric setups.

Properties with an existing heat pump do not qualify for a replacement grant — the grant is one-per-property for fossil-fuel-to-heat-pump conversion only. Hybrid heat pump systems (heat pump alongside a retained gas boiler) are explicitly excluded — the gas boiler must be removed or fully decommissioned.

The heat pump must be sized to meet 100% of the property's heating and hot water demand. Undersized installs that rely on an electric immersion or backup boiler do not qualify. MCS-certified design calculations evidence the sizing.

Gas boilers (mains and bottled), oil boilers, LPG boilers, solid fuel (coal, coke) systems, and solid biomass boilers being replaced by a heat pump all qualify. Decommissioning evidence — gas-safe disconnect, oil tank removal, flue capping — is required at completion.

Off-grid properties (no mains gas) currently heated by oil, LPG or solid fuel are explicit BUS priorities. Where mains gas is unavailable, the grant economics typically deliver shorter payback than mains-gas conversions because the displaced fuel cost is higher.

Direct electric heating (panel heaters, storage heaters, electric boilers, infrared) is NOT a qualifying replacement. Properties on all-electric heating are excluded from BUS regardless of the new heat pump's efficiency improvement. This excludes a significant share of London flats — particularly purpose-built blocks from the 1960s–1990s.

Where a property has a mixed heating system (e.g. gas boiler for radiators plus electric immersion for hot water), the grant qualifies provided the new heat pump replaces the fossil-fuel element AND the immersion is wired as ASHP-driven (hot water from the heat pump rather than direct electric).

Week 1–2: heat loss survey and MCS-certified design. The installer carries out a room-by-room heat loss calculation (under BS EN 12831), confirms radiator and pipework adequacy, and produces a sized heat pump specification. The design must show 100% demand coverage with no fossil-fuel backup.

Week 2–4: quote and contract. The installer prepares a fixed-price quote net of the £7,500 grant — the grant is paid to the installer, not the customer. You sign a contract for the net amount (the gross price minus £7,500), and the installer takes the grant application risk.

Week 4–6: grant application. The installer submits the application via the Ofgem MCS Installation Database — supporting documents include the MCS design, the property address and ownership confirmation, and your consent. Ofgem typically issues a voucher within 5–10 working days of submission.

Week 6–14: install. With voucher in hand, the installer carries out the heat pump install, hot water cylinder, radiator upgrades (if needed), and any electrical supply uprate. Commissioning produces the MCS certificate, the BUS completion submission, and the BUS handover pack.

Week 14–16: grant payment. Ofgem pays the £7,500 directly to the installer. You pay the installer the net contracted amount. The voucher is single-use — if the install does not complete within 6 months of voucher issue, the voucher lapses and a fresh application is required.

Off-grid (no mains gas) properties are not just eligible — they are an explicit priority. Properties currently heated by oil, LPG, or solid fuel are major BUS targets, especially in rural Greater London (parts of Havering, Bromley, Bexley with off-grid pockets).

Hybrid systems where a gas or oil boiler is retained alongside the heat pump are explicitly excluded. This is a common installer offering for properties where full heat pump sizing is difficult — a smaller heat pump for shoulder seasons plus a boiler for cold snaps. These hybrid configurations do not qualify for BUS.

The exclusion exists because BUS is intended to fully decarbonise residential heating, not partially decarbonise it. From the policy perspective, a hybrid install still requires a gas connection and gas safety certification — the carbon reduction is only partial.

Practical implications: for a hard-to-treat older property where heat pump-only sizing is challenging, the choice is between accepting an oversized heat pump (and the associated capital cost) to qualify for BUS, or a hybrid system that does not. Many MCS installers can size to full demand on properties where landlords or homeowners had previously assumed a hybrid was necessary — get a second opinion before assuming the hybrid is required.

Where full sizing requires substantial radiator and pipework upgrades, the BUS net price is often still cheaper than a hybrid install at gross price — the £7,500 grant absorbs much of the radiator upgrade cost. Run both numbers before committing.

0% VAT on heat pump installs runs to 1 May 2027. The BUS grant is paid on the gross price including (notional) VAT — at 0% the headline price is already net of VAT. The two reliefs stack: a £14,500 gross ASHP install becomes £14,500 net of 0% VAT, then £7,000 net of the £7,500 BUS grant. Combined effective discount: 52%.

BUS does NOT count toward the £10,000 MEES cost cap for landlords. This is a useful quirk — landlords pursuing band C upgrades by 2030 can install an ASHP using £7,500 of BUS grant funding without consuming any of their £10,000 MEES allowance, leaving the full cap for insulation and other works.

BUS is one-grant-per-property-per-fuel-conversion. If you have already received a BUS grant on a property (or the previous Domestic RHI scheme), you cannot reapply for the same property. The grant is also tied to the property — a fresh BUS grant is available to a new owner who removes the heat pump and reinstalls a fossil-fuel boiler, but this is rare in practice.

Combining BUS with the Boiler Upgrade Scheme's affordable warmth tail and Warm Homes: Local Grant schemes is possible where the property meets both programmes' criteria. Local Warm Homes funding can cover insulation works alongside the heat pump install, materially improving the heat pump's running cost economics.

Practical sequence advice for a London homeowner deciding between heat pump and replacement gas boiler in 2026: get a heat-loss survey from an MCS installer (typically £150–£300, often refunded against a subsequent install contract); compare the net-of-grant heat pump quote against the gas boiler replacement quote; run the 10-year running cost comparison using a current Cosy or specialist heat-pump tariff (Octopus Cosy delivers around 9p/kWh average over a heat pump's annual operation). On a typical London 3-bed property the heat pump net-of-grant install cost is around £2,500–£4,500 above gas boiler replacement, recovered in 5–8 years of running cost savings on Cosy.