One UK couple saw their energy bills hit £400 a month. Then they installed a heat pump that cost them no more than a replacement boiler, and their bills dropped sharply. That story, as reported by The Cool Down, is a concrete example of what the UK’s Boiler Upgrade Scheme can achieve.
What the Boiler Upgrade Scheme actually covers
The Boiler Upgrade Scheme, launched in May 2022 and extended by the current government, gives homeowners in England and Wales a flat £7,500 grant toward an air-source heat pump. The scheme replaced the earlier Renewable Heat Incentive and is designed to close the gap between a new gas boiler (typically £2,500–£4,000 installed) and a heat pump (often £7,000–£13,000). With the grant, many households pay roughly the same upfront cost as a boiler, exactly what this couple found.
Ofgem, which administers the scheme, reported over 50,000 applications in the first two years. But uptake remains patchy. The catch is that the grant is only available for properties with an EPC rating of D or above, and the heat pump must be installed by an MCS-certified installer. Those with solid walls or poor loft insulation may need to spend extra on fabric upgrades before the heat pump works efficiently.
What it costs a typical 3-bed semi
Take a typical 3-bed semi-detached house in the Midlands, currently on a gas boiler and standard variable tariff. That household might use 12,000 kWh of gas a year for heating and hot water, at current prices of around 6p/kWh, a cost of roughly £720 annually. A well-sized heat pump with a seasonal coefficient of performance of 3.5 would use about 3,430 kWh of electricity, which at 24p/kWh (standard rate) comes to around £823. That looks higher. But switch to a heat-pump-specific time-of-use tariff such as Octopus Agile or Cosy, where off-peak electricity can be 7p–12p/kWh, and the annual cost can drop to £400–£500, a saving of £200–£300 a year against gas.
That £400 monthly bill the couple faced suggests they were on a very high tariff or had poor insulation. The heat pump, combined with the grant and possibly some fabric improvements, brought their bills down to a more normal level. The Energy Saving Trust estimates that a typical household can save £200–£500 a year by switching from gas to a heat pump on the right tariff.
Who qualifies, and who doesn’t
The Boiler Upgrade Scheme is open to homeowners and self-builders in England and Wales. Landlords are excluded, as are new-builds that already meet building regulations. The property must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation, though you can still apply if you’ve already addressed those. The grant covers the heat pump and its installation, but not any associated electrical upgrades, new radiators, or underfloor heating that may be needed. Those can add £1,000–£3,000 to the total cost.
But here’s the pivot: the scheme does not cover biomass boilers or ground-source heat pumps (those get a separate grant of up to £7,500 under a different route). And the cap on total installations per year (around 50,000) means demand can outstrip supply, especially in autumn. The government has announced plans to increase the cap to 100,000 by 2028, but that’s not yet in force.
EPC impact and resale value
Replacing a gas boiler with an air-source heat pump can lift an EPC rating by one or two bands, depending on the property’s existing fabric. A D-rated home could move to a C or even a B. That matters because from 2025, all new tenancies in England and Wales will require a minimum EPC rating of C. While that doesn’t apply to owner-occupiers, a higher EPC can add 5–10% to a home’s resale value, according to recent studies by Nationwide and the HomeOwners Alliance. For a £250,000 property, that’s £12,500–£25,000 of added equity, far more than the cost of the heat pump.
The couple in the case study didn’t just cut their bills; they future-proofed their home against rising gas prices and tightening regulations. With the Boiler Upgrade Scheme running until at least 2028, and the grant now at £7,500 (up from £5,000 in 2023), there’s never been a better time to make the switch.
What to do now: If your boiler is over 10 years old, get quotes from at least three MCS-certified installers through the Heat Pump Association’s register. Check your EPC on gov.uk to see if you qualify. Applications for the Boiler Upgrade Scheme must be made by your installer before work starts, you cannot claim retrospectively. The grant is available until March 2028 or until funds run out, so don’t wait.
Frequently Asked Questions
With the £7,500 Boiler Upgrade Scheme grant, many homeowners pay £3,000–£5,000 for an air-source heat pump, comparable to a high-end gas boiler installation. Without the grant, heat pumps typically cost £7,000–£13,000, which is more than a standard boiler (£2,500–£4,000).
Heat pumps work best in well-insulated homes. If your EPC has outstanding recommendations for loft or cavity wall insulation, you'll need to address those first to qualify for the Boiler Upgrade Scheme. For solid-wall homes, internal or external insulation may be needed, which can add £5,000–£15,000. However, many older homes with moderate insulation can still see good results.
