The Boiler Upgrade Scheme grant for heat pumps will jump to £7,500 from October, a 50% increase on the current £5,000. But the total fund of £450 million stays the same. That is the arithmetic the government has confirmed, and it changes the maths for every homeowner considering a switch.
As reported by Cambridge News, the Department for Energy Security and Net Zero confirmed the new figure will apply to applications from 23 October 2023. The catch is that the scheme’s overall budget has not been increased, meaning the higher per-unit grant could exhaust the fund faster. Ofgem data from August showed just over 20,000 applications had been made since the scheme launched in May 2022, well below the government’s target of 30,000 per year.
Who qualifies, and who doesn’t
Eligibility remains tied to your property’s Energy Performance Certificate. You must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation. That rule alone blocks an estimated 40% of English homes, according to the Energy Saving Trust. If your EPC says ‘install 200mm loft insulation‘ and you have not done it, you cannot claim the grant. The logic is simple: the government does not want to subsidise heat pumps in leaky homes. But the effect is to push upfront costs onto households who might need the money most.
Second homes, new-builds, and social housing are excluded. The grant is for owner-occupiers and private tenants (with landlord permission) in England and Wales. Scotland runs a separate scheme through Home Energy Scotland.
What it costs a typical 3-bed semi
A typical air-source heat pump installation costs between £7,000 and £13,000, including the unit, labour, and any radiator upgrades. The new £7,500 grant therefore covers between 58% and 100% of the cost, a much better deal than before. For a household on a standard variable tariff, switching from a gas boiler to a heat pump can save roughly £300–£400 a year on heating bills, according to the Energy Saving Trust’s calculator, assuming the property is well insulated. The payback period, after the grant, drops to around 5–8 years depending on the property.
But those savings assume the heat pump is sized and installed correctly. Poorly designed systems, undersized units, wrong flow temperatures, inadequate buffer tanks, can double running costs. The Microgeneration Certification Scheme (MCS) accreditation is mandatory for installers, but not all MCS-certified engineers are equally competent. Homeowners should ask for design calculations and reference installations.
The timing trap
The government has not ring-fenced funds for later years. The £450 million cap covers the entire scheme until 2028. If applications surge, and the higher grant is likely to trigger that, the pot could empty before the scheduled end. The previous iteration of the scheme, the Renewable Heat Incentive, ran out of budget in its final year, leaving thousands of applicants in a queue that never got paid. The same risk exists here.
Homeowners considering a heat pump should apply early. The application window opens on 23 October. You do not need to have the installation completed before applying; you need a quote from an MCS-certified installer and a valid EPC. The grant is deducted from the installer’s invoice, not paid as a cashback to you.
What to do next
Check your EPC on the gov.uk register. If it flags insulation work, get that done first, it will improve your EPC rating and get the grant. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. Then, get at least three quotes from MCS-certified installers. Ask each for a detailed design showing the heat pump’s output, flow temperature, and estimated annual running cost. Compare those against your current gas bill.
Applications open 23 October. The higher grant runs until the fund runs out. Do not wait until spring.
Frequently Asked Questions
No. A smart meter is not a requirement for the Boiler Upgrade Scheme. You do need a valid EPC and an MCS-certified installer quote. However, some energy suppliers offer time-of-use tariffs that work best with heat pumps and smart meters, so it is worth considering one.
Yes. The grant for ground-source heat pumps is also increasing, from £6,000 to £7,500. The same eligibility rules apply. Ground-source systems are more expensive, typically £15,000 to £25,000, but they offer higher efficiency and lower running costs than air-source units.
