TL;DR
The Boiler Upgrade Scheme grant for heat pumps is increasing from £7,500 to £9,000 from 21 July 2026 — a 20 percent uplift. The increase specifically targets households on heating oil in England and Wales, which are not covered by the Ofgem price cap. Around 200,000 eligible homes are receiving leaflets this week. Apply through an MCS-certified installer.
Last reviewed: June 2026 | Sources: GOV.UK, DESNZ, MCS
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Energy £9,000 Heat Pump Grant: Key Facts New grant amount: £9,000 (up from £7,500)Increase from: 21 July 2026Who qualifies: households on heating oil, England and WalesEligible homes: ~200,000 receiving leaflets this weekApply via: MCS-certified installer |
What has changed and from when
The government has announced a 20 percent increase to the Boiler Upgrade Scheme (BUS) grant for heat pumps, raising it from £7,500 to £9,000. The uplift takes effect from 21 July 2026 and specifically targets households currently heating with oil rather than gas or electric systems. Around 200,000 homes in England and Wales that use heating oil are receiving leaflets through their doors this week explaining how to apply.
The Boiler Upgrade Scheme provides a voucher redeemed by the installer when they complete the heat pump installation — the homeowner does not receive the money directly and does not need to claim it back. The grant reduces the upfront cost of installation, which typically runs from £8,000 to £20,000 before the grant is applied.
Why heating oil households are the target
Households on heating oil sit outside the Ofgem price cap that protects gas and electricity customers. Heating oil is priced on global commodity markets and is not subject to any domestic price regulation. This means oil-heated households have faced significant price volatility — particularly since 2022 — without the cap protection that gas-heated households receive. The government has framed the £9,000 grant as addressing this structural disadvantage by helping oil-heated households switch to electric heat pumps, which are covered by the electricity price cap and benefit from any future falls in wholesale electricity prices.
Approximately 1.7 million homes in the UK use heating oil, predominantly in rural areas of England, Wales, Scotland and Northern Ireland that are off the gas grid. The BUS uplift applies to England and Wales — Scotland and Northern Ireland have separate energy efficiency schemes.
How the Boiler Upgrade Scheme works
The Boiler Upgrade Scheme is administered by Ofgem. Homeowners apply through an MCS-certified installer rather than applying directly to the government. The process is: obtain quotes from MCS-certified installers, choose an installer, the installer applies for the voucher on your behalf, Ofgem issues the voucher, the installation takes place, and the installer redeems the voucher from Ofgem. The grant is deducted from the installer's invoice — the homeowner pays the net cost.
The scheme requires the property to have a valid Energy Performance Certificate. Properties with an EPC that contains a recommendation to install cavity wall or loft insulation must have addressed that insulation before the BUS grant can be applied. This requirement ensures the heat pump is installed in a property that will operate efficiently — poorly insulated homes can result in higher running costs with a heat pump than with a gas boiler.
What a heat pump costs and what the grant covers
Air source heat pump installation costs vary significantly depending on property size, existing heating system, radiator upgrades required and installer location. A typical installation for a three to four bedroom home costs between £10,000 and £18,000. The £9,000 grant covers a substantial proportion of this cost for properties at the lower end of the range and reduces the net cost for larger installations.
Ground source heat pumps — which draw heat from the ground via buried pipes — are more efficient but significantly more expensive to install, with costs ranging from £15,000 to £35,000. The BUS grant of £7,500 applies to ground source heat pumps (the £9,000 uplift specifically applies to oil-to-heat-pump conversions for air source units — check the current scheme rules at gov.uk for the exact applicable rates).
Running costs: heat pump versus heating oil
Whether a heat pump is cheaper to run than a heating oil boiler depends on the current price of heating oil, the current electricity unit rate, the efficiency of the heat pump (its Coefficient of Performance), and the insulation standard of the property. A heat pump operating at a COP of 3 produces three units of heat for every one unit of electricity consumed. At the Q3 2026 electricity unit rate of approximately 27p per kWh, the effective cost per unit of heat is approximately 9p — comparable to or lower than heating oil at current prices.
Heating oil prices fluctuate significantly. The current price of heating oil in the UK is approximately 65 to 75 pence per litre, producing approximately 10 kWh of heat per litre at typical boiler efficiency — giving an effective cost of around 7 to 8p per kWh of heat. The heat pump advantage increases as electricity prices fall relative to oil prices and as the electricity grid decarbonises.
Other energy efficiency support alongside the BUS uplift
The government announced the BUS uplift alongside several other energy efficiency measures. The Social Housing Decarbonisation Fund will receive a £100 million boost to support up to 57,000 solar installations for social housing in England this financial year. Great British Energy is backing rooftop solar on a further 100 schools and colleges. The Warm Homes Plan continues to provide grants for insulation, heat pumps and other measures for eligible low-income households.
Households on heating oil who are also on low incomes may be eligible for additional support through the Warm Homes Plan in addition to the BUS grant. The two schemes can be used together in some circumstances — check eligibility at gov.uk/apply-home-upgrade-grant.
Boiler Upgrade Scheme: Grant Amounts by Technology
| Technology | Grant Amount (from 21 Jul 2026) | Typical Install Cost | Net Cost After Grant |
|---|---|---|---|
| Air source heat pump (oil replacement) | £9,000 | £10,000-£18,000 | £1,000-£9,000 |
| Air source heat pump (gas/other) | £7,500 | £10,000-£18,000 | £2,500-£10,500 |
| Ground source heat pump | £7,500 | £15,000-£35,000 | £7,500-£27,500 |
| Biomass boiler (rural only) | £5,000 | £10,000-£20,000 | £5,000-£15,000 |
Source: GOV.UK, DESNZ. Costs are indicative — get quotes from MCS-certified installers. BUS grant amounts subject to government review.
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Disclaimer This article is for information only. Grant eligibility criteria and amounts are set by the government and may change. Verify current details at gov.uk before applying. Kael Tripton Ltd is not regulated by the FCA. |
Frequently asked questions
How do I apply for the £9,000 heat pump grant?
You apply through an MCS-certified heat pump installer rather than directly to the government. Find a certified installer using the MCS Find an Installer tool at mcscertified.com. The installer will check your eligibility, apply for the BUS voucher on your behalf, and deduct the grant from your invoice. You do not need to apply to Ofgem or the government directly.
Do I have to be on heating oil to get the £9,000 grant?
The £9,000 uplift (from £7,500) specifically targets households currently on heating oil in England and Wales. Households on gas, LPG or other fuels switching to a heat pump receive the standard £7,500 grant. Check the current BUS eligibility criteria at gov.uk/boiler-upgrade-scheme as the government may extend the oil-specific uplift to other fuel types.
Does my property need to meet EPC requirements for the BUS grant?
Yes. Your property must have a valid EPC. If the EPC recommends cavity wall or loft insulation, you must install this insulation before the BUS grant can be approved. This requirement is intended to ensure the heat pump operates efficiently in a well-insulated property. Properties with solid walls are exempt from this requirement as solid wall insulation is not a straightforward recommendation.
Can I use the BUS grant alongside the Warm Homes Plan?
In some circumstances, yes. Low-income households may be eligible for Warm Homes Plan support in addition to BUS grant funding. The BUS grant is available to all households regardless of income. The Warm Homes Plan targets lower-income households and may cover additional measures such as insulation that increase the effectiveness of a heat pump installation. Check eligibility for both schemes.
Is a heat pump suitable for my home?
Heat pumps work most effectively in well-insulated properties with underfloor heating or larger radiators. Older properties with poor insulation or standard radiators sized for a gas boiler may need upgrades to work efficiently with a heat pump. An MCS-certified installer will carry out a heat loss calculation for your property to determine the appropriate heat pump size and whether any upgrades are needed before installation.
What happens if I receive a leaflet but I rent my home?
The BUS grant applies to the property owner, not the tenant. If you rent a property heated by oil and receive a leaflet, pass it to your landlord. Landlords can apply for the BUS grant for rental properties. The EPC C requirement for new tenancies from 2028 provides landlords with an additional incentive to improve energy efficiency, of which heat pump installation is one route.
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Sources GOV.UK: Boiler Upgrade Scheme |
