The Boiler Upgrade Scheme (BUS) provides upfront capital grants to support the installation of heat pumps, and in some circumstances biomass boilers, in homes and some non-domestic buildings. The BUS is open to properties located in England and Wales. It will run from 2022 to 2028.

Consumers can get:

• £7,500 off the cost and installation of an air source heat pump
• £5,000 off the cost and installation of a biomass boiler
• £7,500 off the cost and installation of a ground source heat pump

Heating systems commissioned on or after 1 April 2022 date are entitled to support under the scheme. (Commissioning is the completion of installation and set-up of the system.) Installers must first open an account for the BUS with Ofgem, the scheme administrator, before submitting grant applications.

Renewable heating systems in the following homes and small non-domestic properties are eligible for support through the BUS:

• Those where the proposed installation capacity is 45kWth or less and where the system will provide for all the space heating and hot water demands.
• Those where existing fossil fuel systems such as oil, gas or direct electricity will be fully replaced.
• Those situated on or off the gas grid for heat pumps but off the gas grid only for biomass boilers.
• Those which are owner-occupied or owned by a private landlord.
• Those in custom-build new build properties only.
• Those in a property with a valid Energy Performance Certificate with no outstanding recommendations for loft or cavity wall insulation.
• Those with a commissioning date on or after 1st April 2022 only.
• Those which comply with the approved standards published here only.

Renewable heating systems in the following homes and small non-domestic properties are not eligible for support through the BUS:

• Those in new builds unless they are custom-build properties.
• Those in and social housing.
• Hybrid systems (any combination of a boiler and electric heat pump, whether installed as a split or integrated system and whether on or off the gas grid).  
• Replacement low carbon heat systems.
• Those where outstanding EPC recommendations for loft or cavity wall insulation cannot be completed before commissioning.
• Those which do not comply with all the conditions set out in the above section.

 

Don't forget that the VAT rate for heat pumps is zero

In the Spring Statement in March 2022, the Chancellor of the Exchequer agreed to reduce to zero the VAT rate for installing those measures on the Energy Savings Materials List from 1 April 2022, until 31 Mach 2027. The List contains renewable energy generating technologies including solar PV and thermal panels, insulation measures, air-, ground- and water-source heat pumps, biomass boilers and wind and water turbines.

You can find more information about this here:
https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipmentnotice-7086

 

RECC Guidance and Model Documents

Following the closure of the Domestic RHI to new applicants RECC has updated all its model documents and guidance specific to heat pumps, biomass boilers and solar thermal systems. These documents explain how to account for the BUS grant in invoices. You can find these documents here (you will have to log in to access the Members’ Area):
https://www.recc.org.uk/member/documents

The heat pump model proposal suggests two ways for installers to account for the BUS grant in their invoices. One is by deducting the appropriate percentage of the total cost accounted for by the grant at all stages of the payment terms. The other is by deducting the total value of the grant from the final invoice issued after installation and commissioning of the system. By using the second option installers can guard against unforeseen events (such as the annual allocation of funds running out or early closure of the scheme) occurring between the point of contract and final payment and voucher redemption.

Both the options set out above are compliant with the Code. Installers must decide which option to use and explain this clearly in their proposal letter before signing the contract. Installers may also add a sentence to the proposal letter and to the contract stating that, if the BUS grant is not available for reasons clearly beyond their control (such as the two scenarios outlined above) the consumer will be liable for the total amount of the grant. Consumers must be made aware of this clearly before signing the contract.

Other useful resources

You can find more information about the BUS and create an installer account at the links below:

Ofgem:
https://www.ofgem.gov.uk/publications/boiler-upgrade-scheme-guidance-installers
https://www.ofgem.gov.uk/publications/boiler-upgrade-scheme-guidance-property-owners
https://www.ofgem.gov.uk/publications/bus-account-creation-guidance
https://www.ofgem.gov.uk/publications/boiler-upgrade-scheme-installer-account-form

BEIS:
BUS Information Leaflet
https://www.gov.uk/guidance/check-if-you-may-be-eligible-for-the-boiler-upgrade-scheme-from-april-2022
https://www.legislation.gov.uk/ukdsi/2022/9780348232349/contents

Energy Saving Trust:
https://energysavingtrust.org.uk/grants-and-loans/boiler-upgrade-scheme/

If you have any queries about the BUS please address them to BEIS at: boilerupgradescheme@beis.gov.uk