The budget available for the Boiler Upgrade Scheme in England and Wales has been increased by the government, meaning households that use oil or LPG for heating will receive additional funds to upgrade their heating system to use a heat pump instead.
These homeowners will now be able to access up to £9,000 towards installation costs, increased from the £7,500 that was originally available. This, the government hopes, will help speed up the shift towards low-carbon heating, particularly in rural areas where oil is more often used, and homes have been significantly impacted by the recent sharp rises in heating oil prices.
The scheme was also previously expanded to include air-to-air heat pumps for the first time, offering a £2,500 discount.
Grants of £7,500 are available for air- and ground-source heat pumps, and £5,000 for biomass boilers, with the BUS running until the end of 2027.
The change comes as the so-called ‘Net Zero Boiler Tax’, which is the cost added to the price of each new gas boiler as a result of fines being applied to boiler manufacturers for failing to meet government targets for sales of heat pumps, rises by 33% to £36.
Mike Foster, Chief Executive of the Energy & Utilities Alliance, said: “Households across the UK are struggling to make ends meet during a prolonged cost of living crisis. Despite repeated assurances that the government is on the side of consumers and focused on cutting costs, the Net Zero Boiler Tax is being increased by a third. Adding £36 to the price of a boiler may not sound significant, but for families already facing higher food bills, fuel costs and ongoing uncertainty about energy prices, every extra pound matters.
“The Clean Heat Market Mechanism is effectively a fine on manufacturers. Those fines do not disappear – they are passed straight on to consumers, turning this into a direct tax on households who need a new boiler.”