1. What is the BUS grant in 2026?
The Boiler Upgrade Scheme is the UK government's flagship grant programme to help households replace fossil-fuel heating systems with low-carbon alternatives. Administered by Ofgem and funded by the Department for Energy Security and Net Zero (DESNZ), the scheme has been running since May 2022 and is currently scheduled to remain open until at least 2028. The grant amount was raised significantly in October 2023, from £5,000 to £7,500 for heat pumps, in response to slower-than-expected uptake.
Grant amounts in 2026: £7,500 for an air source heat pump, £7,500 for a ground source heat pump or water source heat pump, and £5,000 for a biomass boiler. The grant is fixed, regardless of the actual installation cost. If the heat pump installation costs £10,000, you pay £2,500. If it costs £14,000, you pay £6,500. The grant is paid to your installer, not to you directly, and appears as a discount on your final invoice.
One property, one grant: The BUS grant applies once per property. If you already used the grant for a previous installation at the same address, you cannot claim again. Replacing a failed heat pump with a new one does not unlock a second grant, the property is considered already converted. This is important to verify if you are buying a house with an older heat pump installed before the BUS scheme started.
Funding pot and demand: The annual budget for the scheme is publicly disclosed by DESNZ. While the scheme has consistently been undersubscribed in early years, demand has risen sharply since the October 2023 grant increase. There is no waiting list as such, but Ofgem reserves the right to pause new applications if the annual budget is exhausted. As of May 2026, no pause has been announced, and applications continue to be approved on a rolling basis.
Difference from older programmes: The BUS replaced the Renewable Heat Incentive (RHI), which was a multi-year quarterly payment scheme. BUS is simpler: a single up-front grant deducted from your installer's invoice, no quarterly payments, no metering, no income tax implications. This simplification was a key reason for the scheme's redesign and the grant amount increase. If you remember the old RHI complexity, the BUS feels refreshingly straightforward by comparison. For background on how the wider oil shock dynamics make heat pumps economically attractive in the medium term, see our glossary entry.
2. Eligibility: property, EPC, fossil-fuel replacement
The eligibility rules for the Boiler Upgrade Scheme are deliberately narrower than for some other UK energy schemes, which keeps the grant focused on the homes where the carbon-saving impact is highest. Five main criteria apply, and you must meet all of them.
Property type and ownership
The scheme is open to private homeowners in England and Wales who own a residential property. Northern Ireland and Scotland have separate, similar schemes (the Scottish Home Energy Scotland Loan and the Northern Ireland Energy Advice Service operate slightly differently, so do check the relevant regional scheme if your property is outside England and Wales). Small landlords with up to a handful of properties can apply for their rental units, although the application must be made by the property owner and the works must be agreed with any tenant. Social landlords (housing associations, councils) have a separate dedicated route and are usually outside BUS.
EPC certificate within ten years
The property must have a valid Energy Performance Certificate, typically dated within the last ten years. The EPC must not include outstanding recommendations for loft insulation or cavity wall insulation, unless those have been completed since the EPC was issued. If your EPC flags insulation gaps, you will need to either address them first, or obtain a new EPC that does not flag them. The reasoning is straightforward: putting a heat pump into a leaky envelope is poor value for the grant money, because the heat pump will struggle to deliver economically.
Replacing a fossil-fuel system
The new heat pump or biomass boiler must replace an existing fossil-fuel heating system, typically gas, oil, LPG, or direct electric resistance heating. Replacing one heat pump with another is not eligible. Adding a heat pump alongside a kept gas boiler (hybrid systems) is not eligible under BUS, though hybrids may qualify for separate schemes in some regions. The intent is clear: full fuel-switching, not partial.
New-build exclusion
New-build homes are not eligible. The scheme is aimed at the existing housing stock, where the carbon-reduction win is largest. If you are buying a new-build with a heat pump pre-installed by the developer, that installation was either paid for by the developer or through a separate developer-side scheme, but it is not BUS-eligible from your side.
Capacity limits on the heat pump
The grant applies to heat pumps with a thermal capacity up to 45 kW. This covers the overwhelming majority of UK domestic installations, where typical heat pump sizes are between 5 kW and 16 kW. Larger commercial-scale installations are outside the scheme.
Practical pre-application check: get an EPC if you do not have one, ensure your existing fossil-fuel system is in place and operational, and confirm your installer is MCS-certified and registered with the Boiler Upgrade Scheme. Most installers will do the eligibility check for you before quoting in detail.
How much could the next oil-price spike cost your household?
While you plan the upgrade, the next Brent move could push your gas, petrol, and electricity bills up sharply. Get a 60-second estimate so you know what is at stake.
Run the 60-second calculator3. Heat pump types eligible (ASHP, GSHP, biomass)
The Boiler Upgrade Scheme covers three technology categories, each with its own grant level. The right choice depends on your property, garden, and budget, not on the grant amount alone.
Outdoor unit extracts heat from the air. Most common UK choice, typical install £8,000 to £14,000 pre-grant. Suits semis, terraces, detached, where the outdoor unit can be sited reasonably.
Buried ground loop (horizontal collector or vertical borehole). Higher install cost £15,000 to £25,000 pre-grant. Requires garden space or borehole access. Higher efficiency over a year.
Wood-pellet boiler with pellet store. Niche option, mainly off-gas rural properties. Lower grant reflects lower carbon-saving compared to heat pumps. Ongoing fuel cost and pellet logistics to manage.
ASHP is the dominant choice. Around 90 percent of BUS applications are for air source heat pumps, because they are the cheapest to install and suit the typical British house. The outdoor unit is usually mounted at side-of-house or rear-of-house level, with a moderately quiet fan that runs continuously in winter. Modern units are designed to comply with Permitted Development noise limits, so planning permission is not usually required.
GSHP is the long-term efficiency play. Ground source heat pumps cost roughly twice the upfront price of ASHPs, but deliver about 15 to 25 percent higher seasonal efficiency, because the ground temperature is steadier than the air. The grant amount is the same, so the net post-grant cost gap is wider, but for larger properties or for owners planning to stay in the home long-term, the lifetime economics can be more favourable.
Biomass is the niche. Biomass boilers are mainly relevant for rural properties that cannot accommodate a heat pump (extreme low temperatures, very poor insulation, or no electrical capacity for a heat pump upgrade). The grant is £5,000, reflecting that biomass still emits carbon when burned (the carbon saving is relative to oil or LPG, not zero). Pellet supply, storage, and ash handling are practical considerations that put many households off biomass in 2026.
Hybrid heat pump and gas boiler systems are explicitly not BUS-eligible. The scheme is designed for full fossil-fuel replacement. If you want to keep a gas backup, that is your choice, but the BUS grant does not apply.
If you want to dig into the heating oil price trajectory and how that affects oil-boiler-to-heat-pump payback in rural UK, see our glossary, or see our methodology overview for how we model these dynamics.
4. Application process via your MCS installer
One key feature of the Boiler Upgrade Scheme that distinguishes it from many other UK grants is that you do not apply yourself. The MCS-certified installer applies on your behalf, manages the paperwork, and deducts the grant from your invoice. This makes the consumer-side experience refreshingly simple compared with, say, Renewable Heat Incentive applications in the past.
- Step 1: Get an EPC and assess your home Before any installer visit, ensure you have a valid Energy Performance Certificate. If your last EPC is more than 10 years old, or recommends loft or cavity wall insulation that you have not done, you should either commission a new EPC or carry out the recommended insulation work first. An accredited domestic energy assessor (DEA) will produce a new EPC for around £60 to £120. This is the single most common pre-condition that catches applicants off-guard.
- Step 2: Find MCS-certified installers and get quotes Use the MCS Certified website to find local installers who hold the MCS Heat Pump Installation certificate AND are registered for the Boiler Upgrade Scheme. Not every MCS installer is BUS-registered, so verify both. Get two to three quotes for comparison. A good installer will visit, do a Heat Loss Survey to MCS standards (MIS 3005), and provide a written quote with the BUS grant deduction line-item shown explicitly.
- Step 3: Installer submits the BUS application Once you have signed the contract, the installer submits the application via the Ofgem BUS Portal. They upload your EPC, the heat loss survey, the technical specification of the chosen heat pump, and the proposed installation details. Ofgem reviews and typically issues a voucher within a couple of weeks. The voucher is valid for a fixed period (usually 3 to 6 months), giving time to complete the installation.
- Step 4: Installation and grant redemption The installer completes the installation, commissions the system, and submits final paperwork including a commissioning certificate, photos, and the customer's signed declaration. Ofgem redeems the voucher, paying the grant amount (£7,500 for ASHP/GSHP, £5,000 for biomass) directly to the installer. The installer in turn applies the grant as a discount on your final invoice, so you only pay the net amount. There is no income tax implication for you, and no separate claim form to complete.
From first installer visit to final invoice settlement, the typical process takes 8 to 16 weeks in 2026. The bottleneck is rarely Ofgem, it is finding a good MCS installer with available capacity. Demand for heat pumps is rising faster than installer training, so booking ahead is sensible, especially for installations targeted at autumn before the heating season.
Stacking with ECO4 (low-income households)
For households on means-tested benefits or with very poor home efficiency (EPC rating E, F, or G), ECO4 is a separate supplementary scheme administered by major energy suppliers under Ofgem oversight. ECO4 typically funds complementary measures like insulation, ventilation upgrades, or radiator upgrades, which support the heat pump installation. Combined with the £7,500 BUS grant, a low-income household might see a total support package worth £12,000 to £15,000, dramatically improving the affordability of the transition. ECO4 eligibility runs through your energy supplier, not Ofgem directly, and is means-tested. Check with British Gas, EDF, Octopus, Ovo, Scottish Power, or your supplier for their ECO4 referral route.
5. Three real cost examples after grant
To make the economics concrete, here are three typical UK households running an ASHP installation, with the £7,500 BUS grant applied. Numbers are realistic mid-range estimates for May 2026, actual quotes will vary by region, installer, and property specifics.
Example 1: Three-bed semi-detached, gas-boiler swap
Standard household profile. The existing gas boiler is approaching end of life, the couple are looking at either a like-for-like gas replacement (around £3,000) or making the jump to a heat pump. The BUS grant tips the economics meaningfully.
Net £4,500 is genuinely competitive with a like-for-like gas swap once you factor in expected savings on running costs over time. With an Economy 7 or heat-pump tariff, running costs can be lower than gas at current 2026 wholesale prices, although the gap depends on the price cap quarter and your tariff choice.
Example 2: Four-bed detached, oil-boiler swap (off-gas village)
Off-gas household, currently paying around £1,800 to £2,400 a year for heating oil depending on Brent and refining margins. The Brent volatility is the painful part of oil heating, so the heat pump pitch is partly about getting off oil exposure, not just about running cost.
Net £8,000 for replacing an old oil system is a strong proposition. Running costs typically halve compared to oil at 2026 prices, and the household loses its exposure to oil-price spikes, which can be the single biggest argument in rural off-gas areas. Payback against avoided oil bills is in the 8 to 12 year range, well within the typical heat pump lifespan of 15 to 20 years.
Example 3: Two-bed flat (leasehold), gas-boiler swap with low income
This case combines BUS with ECO4 supplementary support. The flat's freeholder has given written consent for an outdoor unit, sited on a small rear courtyard. The installer confirmed eligibility for both BUS and ECO4 before quoting.
Net £3,000 is genuinely affordable for a household on benefits, and the combined BUS plus ECO4 stack drops the effective price by 75 percent. ECO4 referrals run via the energy supplier (Octopus, British Gas, EDF, and others), and the household's installer typically helps coordinate the ECO4 application alongside the BUS application. This is the scenario where the UK grant landscape really delivers on the equity goal: lifting low-income households out of the fossil-fuel trap.
The three examples illustrate the range. For gas-boiler swaps in well-insulated homes, the net cost is typically £4,000 to £6,000. For oil-boiler swaps in rural areas, the net cost is typically £6,000 to £10,000 but the running-cost saving is much bigger. For low-income households who can stack with ECO4, the net cost can drop into single-digit thousands. None of these scenarios make the heat pump free, but all of them shift the economics from a 15+ year payback to something well inside the system's working life.
What would the next Brent shock cost you on oil heating?
Before booking your installer, see what your household would pay if Brent spiked. Compare it against the heat-pump saving and decide with eyes open.
Open the cost calculator