BUS Grant Rates Just Changed — Here's What You Get Now

New From 21 July 2026: £9,000 for Oil-Heated Homes

Announced by the Department for Energy Security and Net Zero on 26 June 2026, the Boiler Upgrade Scheme grant rises from £7,500 to £9,000 for households in England and Wales that replace a heating oil system with an air source or ground source heat pump (per GOV.UK). Around 200,000 oil-heated homes are being contacted directly about the uplift.

Key details:

• The £9,000 rate applies to installations from 21 July 2026 — before that date, the standard £7,500 applies.
• It covers homes currently heated by heating oil (typically rural, off-gas-grid properties). Homes on mains gas, LPG or electric heating remain on the standard £7,500.
• Everything else about the scheme is unchanged: your MCS-certified installer applies on your behalf, you need a valid EPC, and it's one grant per property.
• As of mid-July the official GOV.UK apply page still shows £7,500 — it is expected to update when the new rate takes effect on 21 July.

Oil-heated homes are among the most expensive to run, so the uplift is designed to close the gap between a heat pump installation and simply replacing a like-for-like oil boiler. If you use heating oil and have been quoted for a heat pump recently, it may be worth timing the installation for after 21 July.

What the £2,500 Air-to-Air Tier Means

The Boiler Upgrade Scheme now has four distinct grant levels, up from three. The £2,500 tier applies to air-to-air heat pumps (per GOV.UK) — systems that blow warm air directly into rooms rather than heating water for radiators, so they don't provide hot water.

The exact specification for each tier is determined by the scheme's technical requirements, which are set by Ofgem and updated periodically. The best way to confirm which tier you'd fall into is to get a quote from an MCS-certified installer — they'll assess your system against the scheme's current technical criteria.

Why the Scheme Has Changed Multiple Times

The Boiler Upgrade Scheme was originally launched with grants of £4,000 for air source heat pumps. Since then, amounts have increased significantly:

• April 2022: Scheme launches at £4,000 for air source heat pumps
• October 2023: Rates increased to £7,500 for heat pumps, £5,000 for biomass — the largest single increase in the scheme's history
• 2026: New £2,500 tier introduced alongside the existing £5,000 biomass rate
• March 2028: Current scheme end date (extended from 2026)

Each increase has been designed to close the gap between the upfront cost of a heat pump and a traditional gas boiler, making the technology accessible to more homeowners without requiring a large upfront investment.

Heat Pump vs Biomass: Which Route Makes More Sense?

For most homeowners, the £7,500 heat pump grant will be the better financial choice. Here's a practical comparison:

For the majority of homes connected to the gas grid, an air source heat pump with the £7,500 grant represents the lowest out-of-pocket cost and the simplest ongoing maintenance. Biomass boilers tend to suit rural properties with space for a pellet store and an existing solid fuel heating setup.

How to Apply — Step by Step

The Boiler Upgrade Scheme works differently from means-tested benefits. You don't apply directly to the government. Instead, your chosen MCS-certified installer handles the application to Ofgem on your behalf.

1. 1 Check your eligibility You must own your home (or have landlord consent), have a valid EPC, and be replacing a fossil fuel heating system. No income test required.
2. 2 Find an MCS-certified installer Only installers registered with the Microgeneration Certification Scheme (MCS) can submit BUS applications. Get at least two or three quotes to compare.
3. 3 Get a survey and quote The installer will assess your property, confirm it meets the scheme's technical requirements, and provide a written quote.
4. 4 Installer submits your BUS voucher application Once you agree to proceed, the installer applies to Ofgem. Applications are typically processed within 3–5 working days.
5. 5 Installation and commissioning After voucher approval, your heat pump or biomass boiler is installed. The installer decommission your old boiler and register the new system with MCS.

Can You Combine BUS With Other Grants?

Yes — but not for the same measure. The Boiler Upgrade Scheme grant and ECO4 (the Energy Company Obligation) cannot be stacked for a single upgrade like a new boiler. However, they can be used sequentially:

• ECO4 first: Free insulation (cavity wall, loft, solid wall) for households on qualifying benefits or referred as vulnerable. This improves your EPC rating.
• BUS second: £7,500 towards a heat pump. A better-insulated home means a smaller, cheaper heat pump is needed.

This combination is the most cost-effective route for eligible households — potentially £7,500 + free insulation for a fully upgraded, energy-efficient home.