Boiler Upgrade Scheme (BUS), heat pumps: Warm homes plan funding

The Boiler Upgrade Scheme, a heat pump grant open to almost any homeowner

The Boiler Upgrade Scheme, or BUS, is the part of the Warm Homes Plan funding landscape with the fewest strings attached, and that is what makes it so widely useful. Unlike ECO4 or the Warm Homes: Local Grant, the Boiler Upgrade Scheme has no income test and no benefit requirement. It is open to any homeowner in England or Wales replacing an existing fossil-fuel, or non-heat-pump electric, heating system. It pays a fixed grant of 7,500 pounds towards an air source heat pump, the same 7,500 pounds towards a ground source heat pump including water source and shared ground loops, 5,000 pounds towards a biomass boiler, and 2,500 pounds towards an air-to-air heat pump. The grant is deducted directly from your installer's invoice, so the homeowner never handles the money and there is no claim to chase after the work.

It sits inside the Warm Homes Plan as one of the schemes the plan carries forward rather than closes. BUS is funded to 2028, which makes it one of the more stable routes in a landscape where ECO4 and the Great British Insulation Scheme are winding down through 2026. For a household that earns too much for the benefit-led schemes but wants off oil, LPG or an ageing gas boiler, BUS is usually the route, and it is the one most people are surprised to learn they qualify for regardless of income.

What a typical Boiler Upgrade Scheme install looks like and how it is assessed

A domestic heat pump under BUS is typically in the 5 to 16 kW range, sized to the property by an MCS-certified installer, rather than a one-size unit. The assessment is about the property's heat demand and the existing system being replaced, not an eligibility benefit check, since there is no income test. The key eligibility points are simple, the property is in England or Wales, you are the homeowner or a small business, and you are replacing a fossil-fuel or non-heat-pump electric system. A typical air source heat pump install runs around 8,000 to 14,000 pounds before the grant, with the fixed 7,500 pound grant deducted at source so you pay only the balance. Switching from a gas system, a typical home saves in the region of 2 to 4 tonnes of CO2 a year.

Because the heat pump cost usually exceeds the grant, the honest framing is that BUS covers a large slice but rarely all of the install. That gap is exactly where the Warm Homes Plan's new finance route comes in, and where insulation funding from a separate scheme matters, since a heat pump runs most efficiently in a well-insulated home.

The grant tiers are worth understanding when you are choosing the system. The same 7,500 pound contribution applies to both air source and ground source heat pumps, with ground source including water source and shared ground loops, so a property with the land or the right setting for a ground loop is not penalised on grant value. A biomass boiler attracts a 5,000 pound grant, and an air-to-air heat pump 2,500 pounds, which gives options for properties where a standard air or ground source system is not the best fit. The choice between them is a technical one about the property, the existing system and the heat demand, which is why the sizing happens through an MCS-certified installer's survey rather than a quote over the phone. We help you understand which tier applies before you go to survey, so there are no surprises about the grant figure.

Costs, what you pay, and tax relief

The Boiler Upgrade Scheme is a capital grant rather than an investment, so there is no simple payback to calculate, the question is what you pay after the grant. A typical air source install of 8,000 to 14,000 pounds with the 7,500 pound grant deducted at source leaves a balance the homeowner pays, often a few thousand pounds. Two things close that gap. First, the grant is taken off the installer's invoice, so you never pay the full amount and then claim back. Second, the Warm Homes Plan's new low or zero-interest finance route is designed to help households who do not qualify for grants spread the remaining balance. Where the property also needs insulation, ECO4 or the Great British Insulation Scheme can fund the fabric work separately so the heat pump runs efficiently and the running costs come down. For eligible small businesses replacing a fossil-fuel system, BUS applies too, and qualifying plant can attract the 100 percent Annual Investment Allowance separately. Our cost guide works through the balance after the grant.

Funding routes in detail

BUS is the heat pump route, and it pairs naturally with the others. Many households use the Boiler Upgrade Scheme for the heat pump and a separate scheme, ECO4 or the Great British Insulation Scheme, for the insulation, so the fabric and the heating are each funded by the right route. If you are on a qualifying benefit, ECO4 may fund a heat pump as part of a whole-house package at no cost, in which case you would not need BUS. If your income is too high for grants but the install costs more than 7,500 pounds, the new Warm Homes Plan finance route bridges the balance. You can apply, through your installer, via the gov.uk Boiler Upgrade Scheme route, and your heat pump installer must be MCS Certified.

Small businesses have a route here too, which is easy to overlook on a scheme that is usually framed as domestic. The Boiler Upgrade Scheme covers small businesses replacing a fossil-fuel system on the same fixed-grant basis, so a small commercial premises swapping an old gas or oil boiler for a heat pump can use BUS for the heating and then claim the 100 percent Annual Investment Allowance on other qualifying plant such as solar PV or batteries. That combination is the practical bridge between the domestic and commercial sides of the Warm Homes Plan funding picture, and it is one of the few places where a business can access a grant rather than relying on tax relief alone. Our page on business and landlord energy funding maps the commercial side in full.

Compliance and sector considerations

The Boiler Upgrade Scheme is England and Wales only, and the compliance bar is the installer accreditation. The installer must be MCS-certified and a member of an approved consumer code, RECC or HIES, and the installer applies for the grant on your behalf, it is never paid to the homeowner directly. Air source heat pumps usually fall under Permitted Development but have siting and noise conditions under the MCS 020 standard, so positioning matters, and a heat pump on a listed building needs Listed Building Consent. Heat pumps and any solar PV or battery added alongside follow standard domestic grid connection rules, with G98 or G99 notification applying to PV and battery as normal. The scheme is funded to 2028, which gives it a longer runway than the closing ECO4 and GBIS schemes.

How we approach this kind of project

We are honest about the gap. We do not sell a 7,500 pound grant as a free heat pump, because a typical install costs more than the grant, and pretending otherwise is one of the things that has eroded trust in this sector. Instead we set out the likely balance after the grant, explain how the new finance route and separate insulation funding can reduce it, and only ever refer to MCS-certified installers in an approved consumer code. We check whether a fabric-first insulation measure should come first so the heat pump runs efficiently, and we confirm the property is in England or Wales and replacing a fossil-fuel system before anything else. The grant is handled by the installer at source, so there is no money for you to find up front and claim back.

We are equally straight about running costs, because that is where heat pump claims most often overreach. A heat pump lowers carbon emissions in every case, and when it is paired with a well-insulated home and the right electricity tariff it can lower running costs against oil or LPG, where a home switching from gas can save in the region of 2 to 4 tonnes of CO2 a year. Against mains gas, the running-cost saving depends heavily on tariffs, so we will not promise a guaranteed bill reduction we cannot stand behind. We also handle the practical detail that catches people out, the siting and noise conditions under the MCS 020 standard, since a heat pump's position affects both planning and how well it performs. The installer applies for the grant on your behalf and it is deducted from their invoice, so the process is designed so you never receive or hand over the money yourself, which is your protection against the doorstep scams that plague this sector.

An illustrative example

As an illustrative composite based on a typical Boiler Upgrade Scheme route, consider a detached owner-occupied home in England, off the gas grid, currently heated by an ageing oil boiler, where the owners earn too much for benefit-led schemes but want to cut carbon and escape volatile oil prices. An MCS-certified installer could fit an 11 kW air source heat pump with a hot water cylinder and controls to replace the oil boiler. In an illustrative case the 7,500 pound grant is deducted at source from an install of around 12,500 pounds, leaving a balance of about 5,000 pounds, part funded through low-cost finance, with the work done by an installer in the RECC consumer code. The figures and outcome are illustrative and depend on your property, the install quote and the live scheme rules.

Replacing a gas or oil boiler? You can get the grant whatever your income. Read the grants and funding guide, see the balance after the grant on the cost page, then tell us about your home. You can also read the funding FAQs, or compare BUS with the fully funded ECO4 route and the business and landlord funding routes.