Boiler Upgrade Scheme Explained: £7,500 Grants for Heat Pumps in 2026

What the Boiler Upgrade Scheme is

The Boiler Upgrade Scheme (BUS) is a government grant programme run by Ofgem in England and Wales. It pays a one-off contribution towards the cost of installing a low carbon heating system to replace a fossil fuel boiler. The grant amounts have been increased twice since launch and are now:

• £7,500 towards an air source heat pump
• £7,500 towards a ground source heat pump (including water source)
• £5,000 towards a biomass boiler (rural off-gas properties only)

The scheme is funded until at least March 2028.

Eligibility

You can apply if:

1. You own the property (or you are the small landlord of a property with up to 4 dwellings)

2. The property is in England or Wales

3. The new system replaces an existing fossil fuel system (gas, oil, electric, LPG)

4. The property has a valid EPC dated within the last 10 years

5. The EPC has no outstanding recommendations for loft or cavity wall insulation (these must be done first or be exempt)

The property does not need to be your main residence. Second homes are eligible. Newly built properties are not eligible because they do not have a "replacement" system.

How the application works

You do not apply for the grant yourself. Instead:

1. Choose an MCS-certified installer

2. The installer surveys your property and designs the system

3. The installer applies to Ofgem for the grant on your behalf

4. Ofgem issues a voucher

5. The installer carries out the work

6. The installer redeems the voucher and reduces your bill by the grant amount

Total cost after grant

A typical air source heat pump installation costs £10,000 to £15,000 before grant. After the £7,500 grant, the homeowner cost is typically £2,500 to £7,500.

A typical ground source heat pump costs £18,000 to £30,000 before grant because of the borehole or trench work required. After the £7,500 grant, the homeowner cost is typically £10,500 to £22,500. Ground source has higher running efficiency than air source, so the lifetime cost difference is smaller than the upfront difference.

How heat pumps affect EPC rating

Heat pumps run on electricity, which is more carbon-efficient than gas in 2026 because the UK grid has decarbonised significantly. However, the SAP methodology used to calculate EPC ratings has historically penalised electric heating because of legacy assumptions about grid carbon intensity. As a result, switching from a gas boiler to a heat pump can sometimes reduce your EPC rating slightly even though the property is genuinely lower carbon.

The Department for Energy Security and Net Zero is consulting on revising SAP to better reflect grid decarbonisation, but until that happens, do not assume a heat pump will improve your EPC. Get an EPC simulation from your installer before proceeding if EPC rating is your main concern.

Insulation prerequisites

The grant requires that any loft or cavity wall insulation recommended on your EPC has been done. This rule exists because heat pumps work best in well-insulated properties: putting a heat pump in an uninsulated home leads to high running costs and poor comfort.

If your EPC recommends insulation that has not been done, you will need to either install it (which may also be grant-eligible under separate schemes) or have it formally exempted before you can claim the BUS grant.

Check your EPC first

Look up your property on Property Passport UK at [/search](/search) to see your current EPC rating and the list of recommended improvements. The recommendations section is what the BUS scheme uses to determine whether your property is ready for a heat pump grant.

Check your EPC on Property Passport UK

Property Passport UK shows the official EPC rating for every property in England and Wales, sourced directly from the EPC Register. You can look up any address at [propertypassport.uk/epc](/epc), or search by postcode at [/search](/search) to see the rating, expiry date, recommended improvements, and the gap between current and potential efficiency.

Related guides

• EPC C rating by 2030 explained
• MEES regulations landlord guide
• Cost of going from D to C on an EPC
• Boiler Upgrade Scheme explained