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Boiler Upgrade Scheme (BUS)
The Boiler Upgrade Scheme (BUS) is a flagship, non-means-tested capital grant initiative managed by Ofgem on behalf of the Department for Energy Security and Net Zero (DESNZ). Designed to accelerate the decarbonization of residential heating across England and Wales, the scheme directly subsidizes the high initial capital cost of transitioning from traditional fossil fuel heating systems (mains gas, oil, or LPG) or direct electric heating to clean, low-carbon alternatives.
Unlike targeted social support programs such as ECO4 or the Warm Homes: Local Grant, BUS is universally accessible to all property owners regardless of household income, tax bracket, or benefit status. The scheme operates as an installer-led voucher program, meaning property owners never have to pay the full installation price upfront and wait for a government rebate. Instead, an accredited installer applies for the grant on the customer's behalf and deducts the full value of the government voucher directly off the initial quote and final invoice.
Tiered Grant Structure
The scheme provides non-repayable capital vouchers, with funding tiers based on technology type and existing fuel source:
£7,500 for Air-to-Water Source Heat Pumps (replacing gas or electric systems).
£7,500 for Ground Source or Water Source Heat Pumps (including shared ground loop systems).
£9,000 Uplifted Grant: Off-gas-grid properties replacing existing heating oil or LPG systems with an air-source or ground-source heat pump qualify for an increased £9,000 grant to help bridge higher rural retrofit costs.
£5,000 for Biomass Boilers.
£2,500 for Air-to-Air Heat Pumps (residential units without wet central heating).
Eligibility & Strict System Rules
To qualify for funding, both the property and the planned equipment must meet strict technical criteria enforced by Ofgem:
Eligible Property Types: Owner-occupiers, private landlords, small commercial properties, and domestic custom self-builds.
Ineligible Properties: Social housing and standard commercial property-developer new-builds are strictly excluded.
Full Replacement Requirement: The new low-carbon heating system must completely replace an existing fossil fuel or electric heating setup and meet 100% of the property's space heating and hot water demand. It cannot be used to replace an existing heat pump.
No Hybrid Systems: Systems that combine a heat pump with a backup gas or oil boiler are ineligible.
Capacity Limit: Individual heating systems must have a maximum capacity of 45 kWth (or up to 300 kWth for shared ground loops).
Biomass Conditions: Biomass boiler grants are restricted exclusively to rural properties that are not, and have never been, connected to the mains gas grid.
Simplified EPC Criteria: Properties are no longer required to carry out unaddressed loft or cavity wall insulation recommendations listed on their Energy Performance Certificate (EPC) before securing a BUS voucher, simplifying the path to approval.
MCS Accreditation Mandate: The installation must be designed, fitted, and commissioned by an installer certified by the Microgeneration Certification Scheme (MCS).
Minimum Efficiency: Heat pumps installed under the scheme must meet a minimum Seasonal Coefficient of Performance (SCOP) threshold of 2.8.
0% VAT Stacking: BUS grants can be combined with the government's 0% VAT rate on energy-saving materials, further reducing the overall cost.
Key Operational Rules & Requirements
Rules for Landlords
No Limits on Portfolio Size
Multiple Properties Allowed: Landlords can claim one BUS grant per property across their entire portfolio. Unlike other grant schemes (like the Warm Homes: Local Grant), there is no co-funding rule or reduced grant rate for landlords who own multiple buy-to-let units.
Landlord Must Be the Applicant
Ownership Required: The property owner—not the tenant—is the legally recognized party for the grant application.
Verification: When the MCS installer applies to Ofgem on your behalf, Ofgem will send an automated email directly to the landlord to confirm property ownership and grant consent.
Property & System Rules
Property Classification: Open to private residential properties rented out to tenants. Social housing properties owned by local councils or housing associations are strictly excluded.
System Replacement: The heat pump must fully replace an existing fossil fuel (mains gas, oil, LPG) or direct electric heating setup. It cannot be added as a hybrid unit alongside an existing boiler.
Energy Performance Certificate (EPC): The rental property must have a valid EPC (issued within the last 10 years). There are no longer mandatory prerequisites to clear insulation recommendations before applying.
Minimum Energy Efficiency Standards (MEES) Synergy
Landlords must currently meet MEES regulations (maintaining an EPC rating of E or higher to legally let a property). Installing a heat pump via the £7,500 BUS grant directly improves the property's SAP score and EPC band, helping landlords future-proof their properties against tighter future EPC requirements.
Tenant Consent & Rent Considerations
Tenant Cooperation: Access to the property is required for heat-loss surveys, radiator/pipework sizing, and the installation itself.
Rent Increases: The BUS scheme places no explicit restrictions on rent adjustments post-installation, but standard statutory notice rules apply under tenancy law if you adjust rent after completing home improvements.
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