With the UK Government striving for net zero by 2050, they introduced the Boiler Upgrade Scheme in England and Wales to help homeowners with the cost of replacing fossil fuel heating systems with low carbon options; the grant amounts available reach up to £7,500. 

In early 2024, changes to the deadline and eligibility criteria were announced alongside changes to the proposed ‘boiler tax’, So, in this article we’ll be exploring what the Boiler Upgrade Scheme is, who is eligible, how much money you can receive, how to apply, and what the ‘boiler tax’ has meant for the cost of gas boilers. 

What is the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme is a grant offered by the Government in England and Wales to incentivise the uptake of renewable energy within homes. It provides homeowners with financial assistance to replace their fossil-fuel powered heating, such as a gas boiler, with renewable options, such as an air source or ground source heat pump, or a biomass boiler. 

How does the Boiler Upgrade Scheme work?

The Boiler Upgrade Scheme allows eligible homeowners to get money off the cost of the purchase and installation of an air source heat pump, ground source heat pump, or a biomass boiler when they’re upgrading from a heating system that uses fossil fuel. In many cases, this will be a gas boiler.  

For eligible homeowners, the boiler upgrade scheme is applied for by the MCS accredited installer of your heat pump, and the grant amount is deducted from the amount you pay them to carry out the work. This makes it far easier for you as the homeowner, and means you aren’t out of pocket whilst waiting for reimbursement. 

How much money can I receive through the Boiler Upgrade Scheme?

As of March 2024, the Boiler Upgrade Scheme means that you can get:  

  • £7,500 deducted from the cost and installation of an air source heat pump 
  • £7,500 deducted the cost and installation of a ground source heat pump, including water source heat pumps 
  • £5,000 deducted the cost and installation of a biomass boiler 

How has the Boiler Upgrade Scheme changed? 

In late 2023 and early 2024, there were some significant changes to the original Boiler Upgrade Scheme. These are: 

The time frame 

Originally, the grant was set to be available until 2025. However, that has been extended until at least 2028, which means there’s a bigger window available in which to install renewable energy in a domestic property and receive financial assistance to do so. 

The grant amount 

In October 2023, it was announced that the previously allocated £5000 deduction from the cost and installation of a heat pump would be upped to £7,500 from 23rd October 2023, providing an even greater incentive to pursue domestic renewable energy. 

The eligibility criteria 

In March 2024, the eligibility criteria for a Boiler Upgrade Scheme grant was changed. Previously, homeowners were obliged to upgrade their cavity wall and loft insulation in order to successfully apply for the grant. However, this stipulation was removed to increase the number of people willing and able to install a heat pump in their home. 

Hartswood Heating’s Managing Director Matt’s initial thoughts are: 

“It’s good that they seem to be removing the mandatory insulation from the process of accessing the grant. Although we would always recommend getting your insulation upgraded when getting a heat pump, sometimes it’s just not possible, or not possible at the time of heat pump installation. Not being able to access the grant because of insulation requirements has stopped people installing heat pumps, so this could be a very helpful move for those situations.”

Am I eligible for the Boiler Upgrade Scheme?

You should be eligible for the Boiler Upgrade Scheme if:

  • You own the property – that includes second homes and buy-to-let properties
  • You’re replacing a system powered by fossil fuels
  • Your property is in England or Wales
  • You have a valid Energy Performance Certificate (EPC) 

What properties are not eligible for the Boiler Upgrade Scheme? 

  • Most new build properties, particularly those still with a developer. Though if you’ve moved into a new build with a fossil fuel-powered boiler, you may still be eligible for a grant. 
  • A property owned by a social housing provider
  • A property that’s already been granted government funding or other financial support for the installation of a heat pump or biomass boiler

What are the benefits of the Boiler Upgrade Scheme?

The benefits of the Boiler Upgrade Scheme are both financial, and environmental, and include: 

A reduced initial cost 

Getting an air source or ground source heat pump is no small investment, but the Boiler Upgrade Scheme can significantly reduce those costs. You’ll very likely still need to pay an amount over and above the grant amount, but it will be much less than you would have paid had you not been able to get help from the scheme. 

Cheaper energy bills 

More efficient heating means reduced energy bills, which can really pay off in the long run. These pumps do still use electricity, but with air source heat pumps being 300% more efficient (which means that on average, your air source heat pump produces three units of energy for every unit of electricity it uses) and ground source heat pumps being 400% more efficient, your bills should go down. 

Reduced carbon emissions 

Renewable ways to heat your home, such as air and ground source heat pumps, can significantly reduce your carbon footprint. Without having to use gas, they don’t release the same harmful carbon emissions, and with sources of electricity becoming more renewable as technology advances, the energy that it does use will help that footprint reduce even further. 

Can I use the Boiler Upgrade Scheme on a self build? 

If you or the original owner of the house built the property, or paid a builder to do it for them/you, and it’s never been owned by a business, you could be eligible for the Boiler Upgrade Scheme. 

What types of heating systems are eligible for the Boiler Upgrade Scheme?

Air source heat pumps, ground source heat pumps and, under some circumstances, biomass boilers are the types of renewable heating systems that you can apply for funding for through the Boiler Upgrade Scheme. In order for the renewable heating system to be eligible for the Boiler Upgrade Scheme, it must: 

  • have been commissioned on or after 1st April 2022
  • be fully replacing an existing fossil fuel-powered system, such as gas, oil, or direct electric 
  • have an installation capacity of no more than 45kWth – this does cover most homes 
  • be able to fulfill the full space heating and hot water requirements of the property

What is a biomass boiler? 

A biomass boiler is powered by wood pellets, logs, or chips, and is considered a low carbon option because the carbon dioxide produced through burning the wood is later absorbed by growing trees, and is still significantly less than the emissions produced by fossil fuels. There are restrictions on this type of boiler to protect certain areas, so do check before opting for this type of renewable heating. 

What is an air source heat pump? 

Air source heat pumps extract heat from the air (yes, even in cold temperatures) and allow you to harness it to heat your home through radiators, or through underfloor heating. 

What is a ground source heat pump? 

Ground source heat pumps extract heat from the ground, like air source heat pumps extract it from the air, and convert it into usable energy which you can then heat your home with.

Heat pumps are what most people looking to upgrade their home’s heating to a renewable source are considering, and for those people we’ve written a handy guide to heat pumps. 

How do I apply for the Boiler Upgrade Scheme?

We should mention that it’s essential to engage an MCS accredited installer; the Microgeneration Certification Scheme sets the standard for the installation of low carbon products.

As we’ve mentioned, the grant is handled by the contractor installing your new system. Therefore you should discuss the Boiler Upgrade Scheme early on in the process to enable your MCS installer to check your eligibility, and apply for the grant through Ofgem so that the amount given by the Government can be deducted from your final bill. Ofgem will likely contact you to confirm that the installer is acting on your behalf. 

Are there any deadlines or time frames associated with the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme has been running since 23 May 2022, and, at present, is set to expire on 31st December 2027. 

What is the ‘boiler tax’? 

You may have heard in the news that the ‘boiler tax’ has been postponed by the Government from April 2024 to April 2025. Originally, April 2024 was set to see boiler manufacturers be forced to match, or substitute, 4% of their boiler sales with heat pumps. Failure to do so would mean they’d face a £3,000 fine for each missed installation. 

This is known as ‘The Clean Heat Market Mechanism’, and it’s now been pushed back to April 2025, in order to allow the industry to better prepare. However, in preparation for financial repercussions, boiler manufacturers have been upping the prices of boilers, which of course has a knock on effect on consumers. 

Of this news, Matt said: 

“It did seem unfair that the price of boilers was going up because of the ‘boiler tax’. The manufacturers knew they would get fined so they had to plan to cover those costs. I’m sure the manufacturers would love to hit the targets but there’s not currently enough demand, and those fines would ultimately get added to gas boilers, and end up punishing those who can’t have a heat pump and have to stick with  gas.”

There’s never been a better time to get a heat pump 

Here at Hartswood Heating, we’ve seen the difference that heat pumps can make to the environment, and the long term finances of homeowners who opt for them. With the Boiler Upgrade Scheme offering an unmissable amount of money to help fund these installations, and with the price of gas boilers increased by the Clean Heat Market Mechanism, there’s no time like the present to invest in renewable energy for your home. 

We’re proud to be MCS accredited installers who operate in and around Brighton and Sussex and it’s our pleasure to help homeowners bring renewable heating into their lives, and assist them with getting funding through the Boiler Upgrade Scheme. To get the ball rolling on the installation of an air or ground source heat pump, get in touch with us.