TL;DR:
- The Boiler Upgrade Scheme grant for oil and LPG boiler replacements increased to £9,000 in 2026 — up from £7,500 — covering air source and ground source heat pumps
- Around 1.7 million off-grid homes in the UK heat with oil or LPG and are potentially eligible; the scheme runs through March 2027
- The grant is paid directly to the installer who deducts it from the invoice — you don’t apply yourself; your MCS-certified installer handles the claim
The Boiler Upgrade Scheme (BUS) is the main government grant for replacing fossil fuel heating systems with heat pumps in England and Wales. Since its 2022 launch it has gone through several iterations of grant levels, and the 2026 increase brings the oil and LPG replacement grant to £9,000 — the largest single home energy grant currently available to the roughly 1.7 million UK households not connected to the gas grid.
For many off-grid homes, this change significantly shifts the economics of switching from oil or LPG to a heat pump.
What the Grant Covers
The £9,000 grant applies to:
Air source heat pumps (ASHP): The most common heat pump type, installed externally on a wall or on the ground. Well-suited to most UK homes including older properties if the heating system is appropriately sized.
Ground source heat pumps (GSHP): Higher upfront cost but higher efficiency (COP), particularly in properties with sufficient land for ground loops or access to a water body for open-loop systems.
Biomass boilers: A separate grant of £5,000 applies for biomass boiler replacement in rural off-grid properties. This is a smaller grant and the biomass route carries ongoing fuel costs — most off-grid homeowners considering a switch should look at heat pumps first.
The grant is applied against the installed system cost — equipment and installation combined. It does not cover:
- Radiator upgrades or underfloor heating installation (though these are sometimes needed and worth budgeting for separately)
- Hot water cylinder replacement (often required when switching from a combi boiler system)
- Electrical panel upgrades or consumer unit work if needed to support the heat pump
- Scaffolding or structural work
The headline number is £9,000 off. The actual net cost after the grant depends on the full scope of work required for your property.
Who’s Eligible
To receive the BUS grant, you must:
- Own the property (landlords are eligible for rental properties; tenants cannot apply directly)
- Be in England or Wales (separate schemes apply in Scotland and Northern Ireland)
- Currently have a fossil fuel heating system being replaced — oil, LPG, or electric storage heaters
- Have a valid EPC for the property (F or G-rated properties require an insulation improvement plan, but this doesn’t exclude you from the grant)
- Use an MCS-certified installer
Properties with gas connections are not eligible for BUS. The grant targets off-grid homes specifically — BUS is for the 1.7 million households that cannot access the cheaper gas heating alternative.
How the Application Works
Unlike most grants, BUS is not applied for by the homeowner. The process:
- Get quotes from MCS-certified heat pump installers
- Choose your installer and agree the scope and price
- The installer submits the BUS voucher application on your behalf to Ofgem (who administer the scheme on behalf of DESNZ)
- Ofgem issues a voucher (typically within a few days)
- Installation proceeds; the installer deducts £9,000 from their invoice to you
- The installer claims reimbursement from Ofgem after installation
You never handle the grant money directly. Your financial exposure is the net cost after the grant is deducted. The grant is effectively a payment mechanism between the installer and government — you see it as a lower invoice.
Vouchers are valid for three months, with one extension available. If installation cannot be completed within this window (common for ground source systems requiring ground works), your installer should flag this early.
The Economics in Practice
For a typical 4-bedroom detached off-grid home:
| Item | Typical range |
|---|---|
| Air source heat pump (12kW) + cylinder | £12,000–£16,000 |
| BUS grant | -£9,000 |
| Net cost | £3,000–£7,000 |
| Ground source heat pump (10kW) | £18,000–£25,000 |
| BUS grant | -£9,000 |
| Net cost | £9,000–£16,000 |
These are mid-market estimates. Costs vary significantly by property size, existing pipework and cylinder condition, whether radiator upgrades are needed, and regional installer pricing.
Running cost savings depend heavily on your current oil/LPG consumption and electricity tariffs. Homes on Economy 7 or smart tariffs designed for heat pump operation can see significant annual savings versus oil at current prices. A well-specified ASHP in an adequately insulated home typically runs at a COP of 2.5–3.5 in UK conditions, meaning each unit of electrical energy produces 2.5–3.5 units of heat — substantially more efficient than any fossil fuel boiler.
Finding an Installer
All BUS installations must be carried out by MCS-certified installers. The MCS Certified Product and Installer database at mcscertified.com is the definitive check — any installer claiming to do BUS work who isn’t on this database cannot submit a valid voucher application.
The scheme’s popularity has created installer backlogs in some regions. Getting quotes from three or four installers and booking several months in advance is prudent. The scheme closes in March 2027 — installations need to be complete by then, not just started.
Some installers offer a design survey before committing to a quote. For off-grid homes with older heating systems, this is worth requesting — the survey identifies whether the existing radiators need upsizing, what cylinder arrangement is required, and whether any electrical work is needed, which together determine the realistic total cost.
Common Questions
Do I need to improve my insulation first?
You don’t need to meet a specific insulation standard to get the grant, but an F or G EPC rating requires a written insulation improvement plan before the voucher is issued. More practically: a poorly insulated home will have higher running costs from a heat pump. Your installer should assess heat loss and specify the system size accordingly — an undersized system in a leaky house will struggle to maintain temperature on cold days.
Can I use the grant with other schemes?
The Great British Insulation Scheme and the Energy Company Obligation (ECO4) cover insulation improvements. These are separate from BUS and can be used alongside it. Getting insulation done first (or concurrently) improves the efficiency of the heat pump and reduces running costs.
What if my oil tank lease complicates things?
If you rent your oil tank rather than own it, factor in the early termination terms when timing your installation. Some contracts have notice periods. Your oil supplier can advise on the exit process.
What to Do Next
If you’re in an oil or LPG-heated property:
- Check your current energy use: how many litres do you use per year? What’s your annual heating spend?
- Get an EPC if you don’t have a current one — your installer may be able to arrange this as part of the process
- Contact three MCS-certified installers for surveys and quotes
- Ask each installer to confirm they’ll handle the BUS voucher application
- Compare the net-of-grant quotes, not just the headline prices
The £9,000 grant level makes the heat pump switch financially viable for a broader range of off-grid homes than at previous grant levels. For properties with high oil and LPG consumption and decent insulation, the payback period at current energy prices is within a range that makes the investment straightforward.