The government’s Heat and Buildings Strategy introduced funding for the Boiler Upgrade Scheme (BUS). The scheme provides financial assistance to householders in England and Wales to encourage them to reduce the carbon emissions of their property. A separate scheme runs in Scotland.
BUS funding will run until 2028 and operates on a first-come, first-served basis. It is only available for low carbon heating installations that meet the eligibility criteria.
From Monday 23rd October 2023, the maximum grant available towards the upfront costs of installing an air source, ground source or water source heat pump will increase. The previous maximum grant available was £5,000 for air source heat pumps and £6,000 for ground/water source heat pumps. These will now be increased to a maximum £7,500 grant.
In addition to the grant, no VAT is payable up until 31st March 2027 on the installation of heat pumps or biomass boilers.
There has been no change to the £5,000 maximum funding available towards the installation of a biomass boiler system. Biomass boilers are only supported in rural areas with populations of 10,000 or fewer people. However, your home must be able to support a capacity of 45kWth (kilowatt thermal) and also meet high emissions standards.
Hydrogen boilers and heating systems are excluded from the BUS as are unlikely to be available before the end of the scheme.
The Boiler Upgrade Scheme provides a capital grant, so you are not required to repay it, but you do have to pay the difference between the grant and the full cost of installation. Despite the high costs involved in installing some systems (a ground source heat pump might cost up to £15,000), as energy prices continue to rise you may find that, in the long run, switching to a lower carbon alternative could save you money.
The grant is available to most home owners and private landlords who are replacing existing fossil fuel systems. However, those living in social housing or new build properties, or looking to replace an existing low carbon heating system, cannot apply.
Before applying for the BUS, you must ensure your home has a valid Energy Performance Certificate (EPC). The EPC is valid for ten years and if your home has previously had one you can check online to see if it needs to be updated. If there are any outstanding recommendations for loft or cavity wall insulation, these will need to be carried out before you can make a grant application. Properties that are EPC exempt can also apply. Once installed, the installer will provide the evidence required for receipt of the grant.