The UK Boiler Upgrade Scheme (BUS) offers homeowners a fixed grant of £7,500 towards the cost of installing an air source heat pump in 2026, according to the latest government guidance (GOV.UK, 2026). This amount applies to all eligible heat pump installations, including ground source heat pumps which also receive £7,500, and biomass boilers which receive £5,000. The grant is deducted directly from your installer’s quote, meaning you pay the reduced price upfront.
The £7,500 figure is a significant increase from previous years. This reflects the government’s push to accelerate the transition away from fossil fuel heating. You qualify if you own a property in England or Wales with an existing fossil fuel heating system (gas, oil, LPG, or electric) and have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation. The scheme does not apply to new-build properties or social housing. Applications are made through MCS-certified installers, who handle the paperwork on your behalf.
Eligibility requirements for the grant
To receive the £7,500 BUS grant in 2026, your property must have an EPC rating of D or above, with no outstanding recommendations for loft or cavity wall insulation (Energy Saving Trust, 2026). The heat pump must be installed by an MCS-certified installer and be on the Product Characteristics Database (PCDB). You cannot apply if you have previously received BUS funding for the same property. The scheme is open to owner-occupiers and self-builders, but not landlords or second-home owners. If you live in Scotland, a separate scheme called Home Energy Scotland applies with different grant levels.
How the grant is paid out
You do not receive cash directly. Instead, your MCS-certified installer applies for the grant on your behalf after installation, and the £7,500 is paid to them by Ofgem, reducing your final invoice by that amount (Ofgem, 2026). The installer must provide you with a quote showing the full cost before the grant and the reduced cost after the grant. You must not pay the full price upfront and then claim back, this is not a reimbursement scheme. The grant is available until funds run out or the scheme ends, whichever comes first.
Cost comparison with gas boilers
An air source heat pump typically costs between £7,000 and £13,000 installed, depending on property size and system complexity (Energy Saving Trust, 2026). After the £7,500 BUS grant, your outlay could be as low as £0 to £5,500. In contrast, a new gas boiler costs around £1,500 to £4,000 installed. While the upfront cost of a heat pump after the grant is still potentially higher, running costs can be 20-40% lower than a gas boiler, depending on your electricity tariff and heat pump efficiency. The grant makes heat pumps financially competitive for many households, especially when combined with the lower running costs over the system’s 15-20 year lifespan.
A worked example
A typical 1930s semi-detached house in Manchester, currently heated by an old gas boiler, would pay roughly £3,500 after the £7,500 BUS grant is applied to a £11,000 air source heat pump installation. This figure includes the 0% VAT saving on heat pumps until March 2027, which cuts another £600 from the bill. Based on Energy Saving Trust averages, replacing a gas boiler with a heat pump in this property saves around £395 per year on heating bills. Over 25 years, the total savings reach approximately £9,875, meaning the system pays for itself in just under 9 years. The property requires an EPC rating of D or better with no outstanding loft or cavity wall insulation recommendations to qualify for the grant. For a larger Victorian end-terrace in London with higher heat demand, the upfront cost after the grant might be £5,500, with yearly savings closer to £485 and a payback period of about 11 years.
| Item | Figure |
|---|---|
| Upfront cost after grants | £3,500 |
| Yearly savings | £395 |
| Payback period | 9 years |
| 25-year lifetime savings | £9,875 |
What homeowners often get wrong
The most common mistake homeowners make is assuming the £7,500 BUS grant covers the entire cost of a heat pump installation. This misconception leads to disappointment when quotes arrive, and the key pitfalls fall into three categories.
- Believing the grant covers everything The £7,500 is a fixed contribution, not a full payment. A typical air source heat pump installation costs £9,000 to £15,000, so you should budget for the remaining £1,500 to £7,500 out of pocket. Missing this can mean abandoning the project halfway through.
- Thinking you can apply without an EPC You must have a valid Energy Performance Certificate with a rating of D or above and no outstanding recommendations for loft or cavity wall insulation. Without an EPC, your installer cannot submit the application, and you miss the grant entirely.
- Ignoring the insulation requirement Even if your EPC is a D, any recommendation for loft or cavity wall insulation must be completed before the heat pump is installed. Skipping this voids the grant eligibility, leaving you to pay the full £11,000 to £15,000 cost yourself.
Quick reference
- The BUS grant amount for air and ground source heat pumps in 2026 is £7,500, while biomass boilers receive £5,000.
- You must use an MCS-certified installer to claim the grant, as they handle all application paperwork directly with Ofgem.
- Your property must have an EPC rating of D or above with no outstanding recommendations for loft or cavity wall insulation to qualify.
- The average payback period for a heat pump after the £7,500 grant is 9 to 12 years, depending on your property size and existing heating system.
- Biomass boilers receive a lower £5,000 grant under BUS, but they still require an EPC rating of D or above and the same insulation conditions.
Frequently Asked Questions
The grant is £7,500 for air and ground source heat pumps, and £5,000 for biomass boilers. This is confirmed by GOV.UK guidance for 2026.
You are eligible if you own a property in England or Wales with a fossil fuel heating system and an EPC rating D or above. The Energy Saving Trust states you must also have no outstanding loft or cavity wall insulation recommendations.
You apply through an MCS-certified installer who handles the paperwork and deducts the £7,500 from your quote. Ofgem administers the scheme, and you cannot apply directly.
