The Secretary of State for the Department for Energy Security and Net Zero (DESNZ) has given permission for Ofgem to over-allocate vouchers for the Boiler Upgrade Scheme (BUS) by up to £30 million.

What is the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme (BUS) is a government grant designed to cover part of the cost of replacing fossil fuel heating systems with a heat pump or biomass boiler.

Through the scheme, homeowners could get:

• Up to £7,500 towards an air source heat pump
• Up to £7,500 towards a ground source heat pump (including water source heat pumps and those on shared ground loops)
• Up to £5,000 towards a biomass boiler

The scheme is available for people in England and Wales and is currently set to end in 2028.

Eligibility Criteria:

To be eligible for a grant under the scheme, you must:

• own the property you’re applying for – this includes if it’s a business, a second home, or a property that you rent out to tenants.
• be replacing fossil fuel heating systems, such as oil, gas, electric or Liquefied Petroleum Gas (LPG).

You are still eligible if you’ve already had funding to make your property more energy efficient, for example by installing wall insulation. However, there is no guarantee that you will be awarded funds if you apply.

Please visit the government webpage for more information and the full eligibility criteria: https://www.gov.uk/apply-boiler-upgrade-scheme

The Boiler Upgrade Scheme is an important part of the Government’s Warm Homes Plan. Heat pumps are considered a highly effective technology, being three times more effective than traditional gas boilers. Since heat pumps use electricity, people will be less affected by gas prices and can save around £100 a year on their bills by using smart tariffs.

Update: Boiler Upgrade Scheme

Following the conclusion of the first phase of the Spending Review on 30th October, the Secretary of State for DESNZ has given permission for Ofgem to over-allocate vouchers for the Boiler Upgrade Scheme by up to £30 million in this financial year (2024/25). This additional funding will increase the total budget to £180 million.

The Secretary of State has also given Ofgem permission to over-allocate vouchers up to a total of £250 million, to ensure there will not be a hiatus in support.

Furthermore, the Government has committed to almost doubling the budget to £295 million for the next financial year (2025/26), representing a significant settlement to support the expansion of the low-carbon heat market.

Growing popularity for heat pumps

This update follows a recent increase in applications for the Boiler Upgrade Scheme. Earlier this year, the previous government announced that the number of applications for the scheme had increased by 93% year-on-year in April, with more than £148 million paid out for installations since the scheme started (as of May 2024).

This increase in demand was likely sparked by the previous government’s decision to raise the grant available under the scheme for air source heat pumps from £5,000 to £7,500, and for ground source heat pumps from £6,000 to £7,500.

What is certain is that the Boiler Upgrade Scheme is helping thousands of households to make the switch from fossil fuel heating systems to cleaner low carbon heating alternatives, by covering the majority of the upfront cost of installing a heat pump.

What does this mean for Elmhurst members?

The Boiler Upgrade Scheme offers significant opportunities for industry expansion and investment, making it a powerful catalyst for growth in the energy and retrofit sector.

This recent update is particularly relevant for Retrofit professionals, as more households across England and Wales are likely to want to install heat pumps through the scheme.

Further Resources:

Recent Update: Approval to increase the budget and over-allocate vouchers for the Boiler Upgrade Scheme, November 2024

Growing Demand for Heat Pumps: Demand for heat pumps rises following increase in applications to the Boiler Upgrade Scheme

BUS: Apply for the Boiler Upgrade Scheme