TL;DR: Yes, the Boiler Upgrade Scheme (BUS) grant is currently fixed at £7,500 for both air source and ground source heat pumps. This increased amount aims to make low-carbon heating more affordable, though homeowners must still cover any remaining installation costs through savings or financing.

Is the BUS grant still fixed at £7,500?

For homeowners in England and Wales looking to reduce their carbon footprint and transition away from fossil fuel boilers, the Boiler Upgrade Scheme (BUS) represents a significant financial incentive. A common question for those planning home improvements is whether the support remains at its peak level. As of the current government policy, the answer is yes: the BUS grant is still fixed at £7,500 for eligible heat pump installations.

This scheme is a cornerstone of the UK’s drive toward net-zero emissions, specifically targeting the decarbonisation of home heating. By providing a substantial upfront discount, the government hopes to bridge the price gap between traditional gas boilers and cleaner, more efficient alternatives. Understanding how this grant works, who can access it, and how to fund the remaining balance is essential for any property owner considering an upgrade.

The History and Current Status of the BUS Grant

When the Boiler Upgrade Scheme originally launched in May 2022, the grant levels were set at £5,000 for air source heat pumps and £6,000 for ground source heat pumps. However, in October 2023, the government announced a significant boost to these figures. The grant for both types of heat pumps was increased to a flat rate of £7,500. This change was implemented to accelerate the adoption of low-carbon technology, as the initial uptake was slower than anticipated due to high upfront costs.

This £7,500 figure remains the current standard. It is a non-repayable grant, meaning it does not function like a loan. Instead, it acts as a voucher that reduces the total invoice amount provided by your installer. The scheme is currently scheduled to run until 2028, providing a relatively stable window for homeowners to plan their transitions. However, because the scheme operates on a first-come, first-served basis within a set annual budget, it is always wise to check the latest availability via the official government portal.

What Technologies Qualify for the £7,500?

Not all renewable energy systems qualify for the maximum grant. The £7,500 fixed amount is specifically designated for:

• Air Source Heat Pumps: These systems extract heat from the outside air to heat your home and water. They are the most common type of installation under the scheme.
• Ground Source Heat Pumps: These systems use pipes buried in the garden to extract heat from the earth. While more expensive to install, they often provide higher efficiency.
• Biomass Boilers: It is important to note that biomass boilers also qualify for a £7,500 grant, but only in specific circumstances. They are generally only eligible for properties in rural areas that are not connected to the gas grid and cannot support a heat pump.

The grant is not available for hybrid systems (for example, a combination of a gas boiler and a heat pump). The goal of the scheme is a total transition away from fossil fuels for the primary heating source of the property.

Eligibility and Requirements

To access the £7,500 grant, several criteria must be met. The scheme is primarily available to property owners in England and Wales. This includes private landlords and second-home owners, provided the property meets the technical requirements.

One of the most critical requirements is a valid Energy Performance Certificate (EPC) issued within the last ten years. Crucially, the EPC must show that the property has no outstanding recommendations for loft or cavity wall insulation. If your EPC suggests these improvements, you must complete them before applying for the BUS grant, or the application may be rejected. This is because heat pumps operate most efficiently in well-insulated homes where heat loss is minimised.

Furthermore, the installation must be performed by an MCS-certified contractor. The Microgeneration Certification Scheme (MCS) ensures that the equipment and the installation meet high quality and safety standards. You cannot apply for the grant yourself; your chosen installer must apply on your behalf, and the value of the grant is then deducted from your final bill.

Financing the Shortfall

While £7,500 is a generous contribution, it rarely covers the entire cost of a heat pump installation. On average, an air source heat pump system may cost between £10,000 and £15,000, depending on the size of the property and any necessary upgrades to radiators or pipework. This leaves a “shortfall” that the homeowner must fund.

Many homeowners look to financial products to bridge this gap. Some may choose to remortgage or take out a second charge mortgage to spread the cost over a long period. Others might consider a bridging loan if they are in the process of renovating a property for sale or waiting for other funds to become available.

When exploring these options, lenders will typically perform a credit check to assess your suitability. Get your free credit search here. It’s free for 30 days and costs £14.99 per month thereafter if you don’t cancel it. You can cancel at anytime. (Ad)

If you consider a bridging loan, it is vital to understand how they differ from standard personal loans. Bridging loans are typically short-term and can be “open” or “closed.” An open bridging loan does not have a fixed repayment date, whereas a closed bridging loan has a specific date set for repayment, usually tied to a property sale. Most bridging loans roll up interest, meaning you do not make monthly payments; instead, the total interest is paid at the end of the term.

When considering any form of borrowing against your home, such as a bridging loan or a second charge mortgage, it is vital to remember that your property may be at risk if repayments are not made. Failure to meet the terms of your loan could lead to legal action, repossession, increased interest rates, and additional charges.

The Impact on Property Value and Efficiency

Investing in a heat pump using the BUS grant is often seen as a way to “future-proof” a property. As the UK moves away from gas heating, homes with renewable energy systems may become more attractive to buyers. A high EPC rating, supported by a modern heat pump, can potentially enhance the marketability of a home.

However, homeowners should also weigh the operational costs. While heat pumps are highly efficient, electricity currently costs more per unit than gas. To see a reduction in energy bills, the heat pump must be installed in a well-insulated home and configured correctly. The £7,500 grant makes the capital investment much more palatable, but the long-term benefits depend on the specific characteristics of the building.

People also asked

Can I get the BUS grant for a new build home?

Generally, no. The Boiler Upgrade Scheme is designed to help replace fossil fuel boilers in existing buildings. The only exception is for “self-build” homes that have been built by the owner or a builder for the owner’s use, provided the property has never been owned by a business.

Do I have to pay the £7,500 grant back?

No, the BUS grant is a capital grant and not a loan. As long as you and your installer comply with the scheme’s rules and the installation is completed as agreed, there is no requirement to repay the money to the government.

Is the BUS grant available in Scotland or Northern Ireland?

The Boiler Upgrade Scheme is only available in England and Wales. Residents in Scotland can access similar support through Home Energy Scotland, which offers a combination of grants and interest-free loans for renewable heating.

How long does the application process take?

Once your MCS-certified installer applies for the BUS voucher, it typically takes a few weeks for the voucher to be issued. Once issued, the voucher is usually valid for three months for air source heat pumps and six months for ground source heat pumps.

Can I use the grant to replace an existing low-carbon system?

No, the grant is specifically intended to replace fossil fuel heating systems, such as gas, oil, or electric heating. You cannot use the BUS grant to replace an old heat pump with a newer model.

Conclusion

The Boiler Upgrade Scheme remains a vital tool for UK homeowners, and the fact that the grant is still fixed at £7,500 provides a significant incentive to make the switch. By significantly lowering the entry cost for air source and ground source heat pumps, the government is making sustainable living more accessible to the average household.

While the grant is substantial, it is only one part of the financial puzzle. Property owners must ensure their homes are adequately insulated and carefully consider how they will fund the remainder of the installation costs. Whether through savings or regulated financial products, a clear plan is necessary to ensure the transition to low-carbon heating is both affordable and effective. Always consult with MCS-certified professionals and financial advisors to ensure the path you choose is right for your specific circumstances.