£7,500. That’s what the government is offering to replace your fossil fuel heating system — and most eligible homeowners still haven’t claimed it.
The Boiler Upgrade Scheme Grant (BUS) isn’t a rebate, a voucher you chase, or a means-tested handout. It’s a direct grant, applied by your installer before you pay the balance, covering a substantial chunk of a system that will run for 20+ years.
Administered by Ofgem across England and Wales, it’s backed by £295 million for 2025/26. The money exists. The question is whether your property qualifies and whether you’ve done the groundwork to access it.
Grant Amounts: What the Scheme Actually Pays
The numbers are fixed, straightforward, and worth knowing precisely before you speak to any installer.
| Heating System | Grant Amount |
| Air Source Heat Pump (ASHP) | £7,500 |
| Ground/Water Source Heat Pump | £7,500 |
| Biomass Boiler | £5,000 |
These figures were increased in October 2023: ASHP grants rose from £5,000 and ground source from £6,000, specifically to reflect 2026 installation costs. Biomass holds at £5,000 due to its narrower rural application. Heat pumps dominate, accounting for 96% of all claims issued to date.
No repayment. No income test. One grant per property, processed through an MCS-certified installer via the Ofgem portal.
What Does That Grant Actually Cover?
Here’s where context matters. The grant sounds generous, and it is, but it covers a percentage, not the full bill.
| System | Typical 2026 Cost | Grant | Net Owner Cost |
| Air Source Heat Pump | £12,000–£18,000 | £7,500 | £4,500–£10,500 |
| Ground/Water Source Heat Pump | £18,000–£35,000 | £7,500 | £10,500–£27,500 |
| Biomass Boiler | £10,000–£18,000 | £5,000 | £5,000–£13,000 |
For a standard ASHP install, the grant covers 40–60% of total cost. That’s a meaningful reduction — but “meaningful” depends heavily on your home size, existing pipework, and whether upgrades like new radiators (£500–£3,000) or a hot water cylinder (£800–£1,200) are required. Those extras aren’t grant-funded.
Add zero-rated VAT on qualifying energy-saving installations and you recover another £1,000–£2,000 on a typical job. Most homeowners forget to factor this in. Don’t.
Eligibility: Who Can and Can’t Apply
The criteria are broader than most assume — but there are firm boundaries that catch people off guard.
You qualify if you own a property in England or Wales, currently heat it with fossil fuels (gas, oil, LPG, coal) or direct electric systems, and have no heat pump already installed. The property must be suitable for a system up to 45kWth. New builds without a prior heating system are excluded. Social housing tenants and private renters cannot apply directly — landlords apply on their behalf.
A valid EPC is non-negotiable. If your current EPC flags outstanding insulation recommendations, those must be addressed before an installer can proceed. Off-grid rural properties, particularly those on oil or LPG, account for 56% of uptake — and it’s easy to see why when you examine the running cost gap.
How Does the Application Actually Work?
There’s no homeowner portal. You don’t submit anything to Ofgem yourself.
Your MCS-certified installer surveys the property, quotes the work, and submits the voucher application on your behalf. Approval typically comes within days. Installation must be completed within 120 days of voucher approval. Post-install, the installer redeems the voucher, and the grant is paid directly, reducing your final invoice.
Common delays: outdated EPC, unresolved insulation flags, or using a non-MCS installer. All avoidable. Sort the EPC first — it costs £50–£100 and determines everything that follows.
Running Costs and Long-Term ROI
This is where the nuance lives, and where most comparison articles get it wrong. So let’s be precise.
At 2026 energy prices — 24.5p/kWh electricity, 6.4p/kWh gas — a heat pump running at COP 3.5 delivers heat at roughly 7p/kWh. That’s near parity with gas. In an average UK home with standard insulation, an ASHP costs approximately £735/year to run versus £630 for gas. The heat pump is not cheaper on running costs alone — not yet, not in most homes.
| Scenario | Gas Boiler (Annual) | Air Source Heat Pump (Annual) | Heat Pump Saves? |
| Average home, standard insulation | £630 | £735 | No (-£105) |
| EPC B-rated, optimised tariff | £835–£1,125 | £940–£1,130 | Neutral to yes |
| Off-grid, replacing oil | £1,200+ | ~£700 | Yes (+£500+) |
Why does the 20-year case still favour heat pumps? Because the comparison doesn’t end at energy bills.
What Does the Full 20-Year Picture Look Like?
Gas boilers need replacing around year 13 — typically £3,000 to £4,000. Heat pumps don’t. That single variable is what most gas advocates conveniently omit.
| Cost Category | Heat Pump (Post-Grant) | Gas Boiler | Net |
| Installation | £5,000 | £3,500 | -£1,500 |
| Running Costs (20yr) | £20,600 | £22,500 | +£1,900 |
| Maintenance | £2,500 | £2,000 | -£500 |
| Mid-life Replacement | £0 | £4,000 | +£4,000 |
| Total | £28,100 | £32,000 | +£3,900 |
The £20,600 versus £22,500 running cost figures assume a larger home with ~12,000kWh annual heat demand and reflect optimised operating conditions. In a poorly insulated property, heat pump running costs could exceed gas. In an EPC B-rated home on an off-peak tariff, they undercut gas comfortably. The variables matter — which is precisely why getting your EPC right before installation is foundational, not optional.
BUS vs. Other Schemes: Where Does It Fit?
Understanding what BUS is not is just as important as knowing what it covers.
| Aspect | BUS | ECO4 |
| Grant Value | Up to £7,500 (partial) | Often 100% funded |
| Focus | Heat pumps and biomass only | Boilers and insulation |
| Eligibility | All property owners, fossil fuel | Benefits recipients, D–G EPC |
| Best For | Renewables-ready homes | Low-income efficiency upgrades |
ECO4 suits households on means-tested benefits with poor EPC ratings — and can fund full installations at zero cost. BUS suits everyone else. The two schemes aren’t mutually exclusive; low-income households in eligible properties can sometimes stack insulation support from ECO4 alongside BUS for heat pump grants.
The Great British Insulation Scheme provides additional loft and cavity wall support — worth exploring before your ASHP install to maximise efficiency and, consequently, savings.
The Bottom Line
The BUS grant is worth £7,500 in cash, £1,000–£2,000 in VAT relief, and £3,900 in projected 20-year net savings over gas — plus the avoided cost of a mid-life boiler replacement most people don’t plan for.
For off-grid homes replacing oil or LPG, add £500–£1,000 in annual bill reductions on top. Over 38,000 vouchers issued by 2024, with rural and off-grid properties leading uptake. The scheme is funded, functional, and accessible.
Audit your EPC. Get three quotes from MCS-certified installers. Then decide — with actual numbers, not assumptions.
