TL;DR:
- From 21 July 2026, properties currently heated by oil or LPG get a £9,000 BUS grant toward a heat pump — up from the standard £7,500
- The enhanced rate is available until 31 March 2027 and covers 1.7 million UK households not connected to the gas grid
- Gas prices rose 27.7% in Q3 2026, making the running cost comparison between oil/LPG and heat pumps more favourable than it’s been in years
If you heat your home with oil or LPG, this is probably the most financially significant clean energy policy change to affect you in a decade. The Boiler Upgrade Scheme — the main government grant for switching to a heat pump in England and Wales — just got a significant uplift for off-gas-grid homes.
From 21 July 2026 to 31 March 2027, homes currently heated by oil or LPG boilers can claim £9,000 toward the cost of a new air source or ground source heat pump. That’s £1,500 more than the standard BUS rate, and it applies specifically because the government recognises that off-grid homes have higher heating costs, fewer alternatives, and are often the hardest to decarbonise.
Who Gets the Enhanced Rate
The £9,000 grant is specifically for properties that are currently heated by oil or LPG. You need to be in England or Wales (Scotland has its own scheme), the property needs to be your primary residence, and the heat pump installation must be carried out by an MCS-certified installer.
You can’t claim BUS if you’ve previously received a BUS grant for the same property, or if you received a Renewable Heat Incentive (RHI) payment — most people know whether this applies to them.
Beyond those basics, the property needs to meet an EPC standard. Currently, homes with an EPC rating of D or above are eligible for BUS. E, F, and G-rated properties need to improve their insulation first — which makes sense, since putting a heat pump into a poorly insulated house is an inefficient use of money for everyone.
What the Money Actually Gets You
The average installed cost of an air source heat pump in Q1 2026 was around £13,100. With the £9,000 enhanced grant, your net outlay is approximately £4,100 — comparable to a standard gas boiler replacement if you were on the gas network, which you’re not.
Ground source heat pumps are more expensive to install (typically £15,000–£25,000 depending on the ground loop configuration) but more efficient, particularly in older rural properties with large gardens. The £9,000 grant applies to ground source too, so the net cost with grant is £6,000–£16,000 depending on the system.
Neither figure includes any additional works — underfloor heating, larger radiators, or improved insulation — that might be recommended alongside a heat pump. A good installer will survey your property and give you an honest picture of what else, if anything, needs doing to make the heat pump perform well.
The Running Cost Question
Here’s the thing people always want to know: will a heat pump actually be cheaper to run than my oil or LPG boiler?
The honest answer is: it depends on your specific property, how well-insulated it is, your electricity tariff, and how the heat pump is commissioned. But in mid-2026 the cost comparison has shifted considerably in favour of heat pumps.
Ofgem’s Q3 2026 price cap saw gas prices rise 27.7%. Oil and LPG aren’t covered by the price cap — they’re wholesale market prices — and both have been elevated through 2025-26 relative to recent years. Meanwhile, smart electricity tariffs specifically designed for heat pump owners (Octopus Cosy, Agile, and similar) offer cheap overnight rates that can bring heat pump running costs well below what many off-grid homes are paying for oil or LPG.
A typical 4-bedroom detached home might use 20,000-25,000 kWh of heat annually. At an oil price of 75p/litre and a boiler efficiency of 85%, that’s roughly £1,600-£2,000 per year in oil costs. A heat pump with a seasonal coefficient of performance (SCOP) of 3.0, running on an overnight electricity tariff at 10p/kWh, costs approximately £670-£830 per year for the same heat output. Even on a standard electricity tariff at 24p/kWh, the heat pump costs around £1,600-£2,000 — broadly the same as oil at current prices, but without the exposure to oil price volatility.
These are illustrative figures, not guarantees. Get quotes and ask installers for realistic SCOP estimates for your specific property.
How to Apply
The BUS grant is claimed by your MCS-certified installer, not by you directly. The process:
- Get at least two quotes from MCS-certified heat pump installers. Make sure they know you’re claiming BUS — they’ll need to submit the application on your behalf before installation starts.
- The installer submits a pre-installation application through the BUS portal. You can’t claim retrospectively — the application must be approved before the work begins.
- The installer completes the installation, commissions the system, and provides your MCS certificate.
- The installer claims the grant, which reduces the amount they invoice you.
In practice, reputable installers handle this routinely and most will have the process well-organised. What you can do to make it smooth: have your EPC certificate ready (your installer will need it), and ask specifically about the oil/LPG enhanced rate if you’re not sure the installer has quoted with that in mind.
Is the Timing Right?
The March 2027 deadline sounds distant, but MCS-certified installers are in demand and booking lead times have extended through 2026. If you want to benefit from the enhanced rate, starting the quotation process now — rather than in early 2027 — gives you considerably more flexibility.
The case for oil and LPG homes has genuinely strengthened this year. The grant is at its highest level, oil and LPG prices are elevated, the smart tariff market for electricity has matured, and heat pump technology has continued to improve. If you’ve been waiting for the moment to make the switch, this is probably it.
The MCS website has a certified installer finder. The Energy Saving Trust’s helpline (0800 444 202) can also help if you’re not sure where to start and want impartial advice before getting quotes.