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The Boiler Upgrade Scheme: Explained

Latest update - October 2023

What the Net Zero Strategy update means for homeowners heating their homes?

What we know so far:

  • The Boiler Upgrade Scheme (BUS) grant has been increased to £7,500 to enable homeowners money off heat pump installs in England & Wales.
  • The proposed phase-out on the installation of fossil fuel appliances is 2035 this now includes LPG, oil and coal appliances.

FAQ

Q: What do we do if we’ve already had the application approved at the previous value?

A: If you have already applied for your BUS voucher but not yet had your heat pump installed, you will only be eligible for the original amount of £5,000 for an air source heat pump and £6,000 for ground source heat pump. You are able to revoke your current voucher and reapply after Monday 23 October where you may be able to receive the higher value of £7,500.

You can find out more about BUS here.

What is the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme (previously referred to as the Clean Heat Grant) is the latest iteration of the Government’s financial support of low carbon heating. The scheme is designed to help achieve the UK’s net zero emissions target by 2050 by incentivising and increasing the use of low carbon heating by reducing the upfront cost for homeowners. The BUS provides grants to support the installation of heat pumps and biomass boilers. Unlike the previous scheme (The Renewable Heat Incentive), this scheme is installer-led, requiring the MCS-certified installer to apply on the property owner’s behalf. The homeowner then only needs to confirm their consent for the application. Once the heat pump has been commissioned, installers are then able to apply for a voucher redemption. The validity period of this voucher is dependent on the low carbon technology that has been installed.

The scheme is expected to run until April 2028 and has been earmarked a budget of £450 million over the six years as part of an almost £4bn strategy to help cut carbon emissions.

We’re supporting installers with the updated scheme by offering advice and information on any incentives and initiatives that may affect you and your business. Here’s what you need to know about the Boiler Upgrade Scheme…

Note: For those living in Scotland, click here to learn about HES funding. For Northern Ireland, there may be alternative funding available.

The scheme opened for grant applications and payments on 23rd May 2022.

What funding is available through the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme provides funding in the form of a grant of up to £7,500 to reduce the upfront installation cost of your customer’s chosen low carbon system. You can apply for the grant on behalf of your customer, and it should be discounted from the total cost of the installation within your quote.

Dependent on the homeowner’s eligibility, your customer may be able to claim the following:

  • £7,500 off the cost and installation of an air source heat pump
  • £5,000 off the cost and installation of a biomass boiler
  • £7,500 off the cost and installation of a ground source heat pump

It should be noted that for any heat pump to be eligible for the grant, it must have a seasonal coefficient of performance (SCOP) of at least 2.8. it is also important to note that, in this instance, the Government seem to include Water Source Heat Pumps to be within the same category as Ground Source Heat Pumps

Biomass boilers are only eligible for this scheme in very limited circumstances, such as if your customer lives in a rural location and in a property that is not connected to the gas grid (Heat pumps are eligible either on or off the gas grid).

Eligibility Criteria:

Property owner eligibility

Your customer must meet the following criteria to be eligible:

  • live in England or Wales
  • own the property (whether this is a home or a small non-domestic property)

Property eligibility

The eligibility requirements for the proposed property are as follows:

The property must be in England or Wales

Properties must have a valid Energy Performance Certificate (EPC) (ie no more than 10 years old) unless they meet the definition of an eligible self-build*

Domestic and non-domestic properties include, but are not limited to, owner-occupied properties, properties rented out to tenants, second homes and holiday homes.

Properties such as churches and park homes may be eligible if an EPC can be issued on the basis that it is a property and all other eligibility requirements are met.

* Eligible self-builds are new builds which were built using either the resources or labour of an individual. This includes buildings where a builder is contracted by an individual to create a ‘custom-build’ or where a private individual builds it as a DIY ‘self-build’ project. The eligibility requirements for a self-build property are as follows:

  • The building was built principally with the use of the labour or resources of the first owner (including where the resource was a loan which the first owner was liable to repay)
  • The new building has not, while the building was built or at any subsequent time, been owned wholly or partly by a person who is not an individual.
  • The date the new building was first occupied must be on or after the first commissioning date of the heat pump.

For further advice on property eligibility, check Ofgem’s Installer guidance.

Domestic and non-domestic properties are eligible. The eligibility requirements are the same for domestic and non-domestic properties.

Technology eligibility

Air source heat pumps, biomass boilers and ground source heat pumps (including water source heat pumps and shared ground loops) are the eligible technologies under BUS and they must meet the requirements of the latest MCS standards, and the standards approved and published by the Secretary of State.

For the customer’s low carbon technology to be eligible for the scheme, it must:

  • be commissioned on or after 1st April 2022. Commissioning occurs when the installer has tested and signed off on the installed low carbon heating system (Ofgem will accept the commissioning date stated on the MCS installation certificate.)
  • have an installation capacity of no more than 45kWth (this covers most homes). This also includes shared ground loop systems where the maximum permitted capacity of the whole system cannot exceed 45kWth.
  • distribute heat using a liquid (usually through underfloor heating or radiators) meet the full space heating and hot water demands* of the property
  • the new low carbon heating system will need to completely replace an existing fossil fuel heating system (such as oil, gas or direct electric) which does not include a heat pump.
  • any heat pump must have a seasonal coefficient of performance (SCOP) of at least 2.8

* ‘Hot water needs of the property’ refers to the hot water intended for the personal use of the individuals who use or occupy the eligible property. It is permitted for the heat pump or biomass boiler to also provide hot water for the purposes of heating a swimming pool or carrying out a process, but these needs do not have to be met for the technology to be eligible.

Unfortunately, conventional hybrid systems that use a fossil fuel source are not included in the eligibility for this scheme, and neither are solar thermal heating systems. However, if a hybrid system is installed with a heat pump and solar thermal, then this may be eligible providing the heat pump covers all of the heat and hot water requirements (as there is no specific funding for solar thermal systems themselves).

For further eligibility criteria and exceptions, please review the government legislation.

What are Installers responsible for?

As an installer, your responsibilities with regards to this scheme are as follows:

  • Be MCS (Microgeneration Certification Scheme) certified
  • Submitting voucher applications and voucher redemption applications on behalf of the property owner
  • Providing accurate information in relation to the application and informing Ofgem of any incorrect information
  • Retaining copies of all information related to the submission of the voucher application and voucher redemption application for 6 years.
  • Providing any further information relating to the application upon request by Ofgem.
  • Engaging with any audit and compliance process upon request by Ofgem.

How to apply for the Boiler Upgrade Scheme

The first step to applying to the Boiler Upgrade Scheme is creating an account with Ofgem to submit a voucher application. Ofgem recommends installers allow 2-3 weeks for account processing prior to submitting their first voucher application.

By creating an account, installers will then receive an account ID which is required to be submitted for each voucher application. This will save the resubmission and verification for subsequent applications. An installer account can also add additional users into the organisation. Accounts can be set up both for registered companies and other entities, such as sole traders.

Only MCS certified installers are eligible to create an account, and providers must provide their MCS number during the account creation process. The individual that sets up the account will then become the authorised representative of the account and will be legally responsible for any activity undertaken by the account.

Please note, account creation is for administrative purposes and accounts will not be listed as ‘approved’ or ‘accredited’ installers. Account creation does not guarantee successful voucher applications.

The installer account creation form can be found on the Ofgem website, or by clicking the button below. For more information regarding account setup, check Ofgem’s Installer guidance document.

Ofgem will assess the application and acquire confirmation of the property owner's consent

The voucher is valid for 3 months for Air Souce Heat Pumps and Biomass Boilers

The voucher is valid for 6 months for Ground Source Heat Pumps (this includes Water Source Heat Pumps)

Once the plant has been commissioned and within the voucher's validity period

Installations of ASHPs and biomass boilers receive a payment of £5000.

Installations of GSHPs receive a payment of £6000

FAQs

For more legislation-specific information, please find our list of government resources below:

The Boiler Upgrade Scheme (England and Wales) Regulations 2022

Government Guidance