Director of Delivery and Schemes
The Boiler Upgrade Scheme opened to applications on 23 May 2022.
As we transition towards net zero, the way we heat our homes needs to change. In 2021, domestic properties emitted 68 million tonnes of carbon dioxide (CO2) – around 20% of all the CO2 emissions in the UK. To support the net zero transition, the government has introduced the Boiler Upgrade Scheme (BUS). The scheme enables property owners to move away from their reliance on fossil fuel systems to switch to a cleaner, more efficient heating system in an affordable way. Long term, low carbon technology will allow property owners to cut their emissions and reduce their energy bills.
Following the closure of the Domestic Renewable Heat Incentive scheme – where we accredited over 110,281 installation and paid £819.3m to consumers, Ofgem is now administering the new Boiler Upgrade Scheme on behalf of government. The scheme supports the continued drive for a transition to low carbon heat in our homes and businesses by providing grants towards the cost of heat pumps.
We have worked closely with the Department for Business, Energy and Industrial strategy (BEIS) and industry to deliver a scheme that will be instrumental in reducing emissions, reduce the UK’s dependency on fossil fuels and will make a positive difference to energy consumers.
The scheme has three main objectives, the first is to encourage the uptake of low carbon heating systems in our homes. BUS will support up to 90,000 installations by March 2025, generating 0.3TWh of heat between 2022 and 2050. Low-carbon heating technology will significantly reduce the UK’s dependency on fossil fuels and exposure to global price spikes. Heat pump technology currently offers a carbon saving of up to 65% compared with a gas boiler.
The scheme has a £450 million budget and should generate £660 million of social benefits.
What’s on offer?
The BUS is open to domestic and small non-domestic properties in England and Wales until 2025.
The BUS offers £5,000 towards the cost of an air source heat pump and £6,000 towards the cost of a ground source heat pump. It also offers £5,000 towards a biomass boiler for properties in rural areas that are not connected to the gas grid. The funding can only be used to replace traditional fossil fuel heating systems (gas, oil or electric).
To help reduce costs further the government has introduced 0% VAT in the installation of energy saving equipment including heat pumps and biomass boilers for the next 5 years.
The application process will be installer led, meaning installers will apply on behalf of property owners. Property owners will, however, also need to complete an online form. This has been designed following extensive research with consumers, highlighting our commitment to continuous improvement.
We would encourage eligible householders to take advantage of this scheme to help decarbonise our energy supply. We will work with installers to ensure that the scheme runs as smoothly as possible. The BUS plays a key enabling role to develop the low carbon heat market and supply chains over the decade ahead and support the mass rollout of low carbon technologies.
For more information on the BUS application process, please see our website and keep an eye on our social media channels for updates.
We look forward to working with installers now and in the future.