Heat Pump Grants UK 2026: The Boiler Upgrade Scheme Explained

The Boiler Upgrade Scheme (BUS) is the main UK government grant for heat pumps in England and Wales. It's been running since May 2022 and was extended to 2030 in April 2026 as part of the Warm Homes Plan. For most homeowners it's the difference between a heat pump being a £12,000–£14,000 decision and a £4,500–£7,000 one.

The big picture in 2026: the grant is £7,500 for an air-to-water heat pump (the most common type), with a £9,000 enhanced rate announced for homes currently on oil or LPG, due to start in July 2026. The mandatory EPC requirement was removed on 28 April 2026, and air-to-air systems were added to the scheme at a lower £2,500 rate.

How much you can get

The grant is deducted directly from your installation quote — you don't pay full price and claim it back. Your MCS-certified installer applies for a voucher through Ofgem before the work starts, the voucher gets approved, the install goes ahead, and the installer redeems the voucher after commissioning. The £7,500 (or £2,500, or £5,000) comes off your bill at the point of sale.

Who's eligible

You can apply for the BUS if all of the following are true:

• You own the property in England or Wales — homeowners, private landlords, small businesses, and genuine self-builders all qualify.
• You're replacing a fossil-fuel or direct-electric system — gas, oil, LPG, coal, or electric heating (storage heaters, panel heaters, electric boilers).
• The installer is MCS-certified — both the firm and the product must be on the MCS register.
• You haven't already had public funding for the same heat pump installation (you can't double-dip with ECO4 or the Warm Homes: Local Grant for the same measure).

Who's not eligible

• New-build properties — except genuine self-builds where the property is built primarily using the labour and resources of the first owner.
• Social housing — including shared ownership, council and housing association tenants, and properties let at below-market rates. These have separate routes (Warm Homes: Social Housing Fund and equivalents).
• Hybrid systems — a heat pump paired with a new gas, oil or LPG boiler does not qualify. BUS is for full replacement of the fossil-fuel system, not supplementation.
• Northern Ireland and Scotland — Scotland has its own scheme (Home Energy Scotland) and Northern Ireland has separate arrangements.

How to apply, step by step

1. Get quotes from MCS-certified installers — they'll do a proper heat-loss survey of your property, design the system to MCS standards, and quote with the grant deducted.
2. Choose your installer — make sure the quote clearly shows the BUS grant deducted, an itemised radiator/cylinder schedule, and the design flow temperature.
3. The installer applies for a voucher via Ofgem's online portal, with your consent.
4. Ofgem emails you to confirm consent and check eligibility.
5. Voucher is approved — typically within 2–4 weeks.
6. Installation goes ahead — usually 2–5 days on site.
7. Installer redeems the voucher within 120 days of the MCS commissioning date.

You don't deal with Ofgem directly — your installer handles all the paperwork. The grant comes off your bill, so you only pay the balance.

0% VAT on top of the grant

On top of the BUS, heat pump installations are zero-rated for VAT until 31 March 2027. On a £14,000 installation that's a saving of roughly £700 compared to the 5% reduced rate the scheme will revert to. Standalone batteries, insulation, solar PV and several other measures also qualify. After 31 March 2027 the rate reverts to 5% unless the Treasury extends it.

The total picture for a typical home

DESNZ statistics from the most recent published quarter (October–December 2025) show the average BUS-claimed installation cost was £13,431 for an 8.4 kW system. With the £7,500 grant, that's around £5,931 out of pocket — and lower again if 0% VAT was already applied. For an oil/LPG home from July 2026, the same install would come down to around £4,431.

Scotland

Scotland has the Home Energy Scotland Grant and Loan, administered by Energy Saving Trust on behalf of the Scottish Government. It pays a grant of up to £7,500 plus an optional interest-free loan of up to £7,500 — so up to £15,000 combined. There's a £1,500 rural and island uplift, taking the grant to £9,000 in qualifying locations (or up to £18,000 with the loan added).

Eligibility is broadly similar — you must own the property, it must be your primary residence, and the heat pump must provide 100% of heat and hot water. Hybrid systems are not eligible.

Wales

Wales offers the Nest Warm Homes Programme for eligible low-income households, which can include heat pump funding alongside insulation, solar and other measures. Wales-resident homeowners are also eligible for the BUS in the same way as English homeowners.

Common questions

Can I combine BUS with other schemes?

You can't combine BUS with ECO4 or the Warm Homes: Local Grant for the same measure. But you can use BUS for the heat pump and separately claim insulation funding (e.g. ECO4 or WHLG) if you qualify. They're for different things.

Does the property still need to be insulated?

Not as a grant condition any more — but yes in practical terms. A heat pump in a leaky, uninsulated home will be larger, more expensive, and have a poorer real-world SPF. If you're making a single investment, fabric first is still the right order: loft, cavities, draughts, then heat pump.

What if my property doesn't have an EPC?

From 28 April 2026, you no longer need one to apply for BUS. You may still want to get one (around £60–£120, valid 10 years) — it gives you a baseline for any insulation work and is useful when selling.

How long does the voucher take?

Typically 2–4 weeks from installer application to Ofgem approval. Vouchers are valid for 6 months once issued, so there's no rush to start work immediately.

What does the average homeowner actually pay?

Based on Ofgem's BUS claim data, the typical out-of-pocket cost in late 2025 was around £5,500–£7,000 after the grant for a standard semi or detached property. Smaller homes pay less; larger or more complex retrofits pay more. From July 2026, oil/LPG homes should expect around £4,000–£5,500 net.