The £7,500 Boiler Upgrade Scheme (BUS) Explained for 2026: Who Qualifies and Whether a Heat Pump Actually Pays

The Boiler Upgrade Scheme (BUS) is the single biggest home-energy incentive currently available in the UK — a genuinely generous grant that knocks a large chunk off the cost of a heat pump. But a grant reducing the price of something is not the same as that something being right for your house. Here's how the scheme actually works in 2026, what you'll realistically pay after the grant, and the honest question of whether it pays for you.

What the grant is worth in 2026

The BUS is administered by Ofgem for homes in England and Wales. The grant is applied by your installer as an upfront discount — you never handle the money yourself. The amounts in the current scheme are:

Technology	Grant
Air-source heat pump	£7,500
Ground-source heat pump	£7,500
Air-source heat pump replacing an oil or LPG home	£9,000
Air-to-air heat pump	£2,500

Scotland is different. If your address is in Scotland, the BUS doesn't apply — you route through Home Energy Scotland, which offers a grant plus an interest-free loan. Northern Ireland has a separate market again. Confirm which scheme applies before you count on any figure.

Who qualifies

The core requirements are simpler than most people expect:

• The property must be in England or Wales (Scotland/NI as above).
• The installer and the product must be MCS-certified — this is non-negotiable and it's the installer who claims the grant on your behalf.
• You're replacing a fossil-fuel heating system (gas, oil, LPG or electric).

There is no income test for the BUS — it's open to any eligible owner regardless of earnings. That's a different scheme from the Warm Homes Plan (the Warm Homes: Local Grant and Social Housing Fund), which is income- and tenure-based and can fund heat pumps, insulation and solar for low-income households and social landlords. Don't assume you qualify for that one — eligibility is confirmed case by case. Note too that the old ECO4 scheme closed to new applications on 31 March 2026, so ignore any advice built around it.

What an air-source heat pump really costs after the grant

Once the £7,500 is deducted, indicative installed costs for a typical home land somewhere in the region of £3,000 to £7,000. Where you sit in that range depends heavily on your house: the size and heat loss of the property, whether your radiators need upsizing to run at lower flow temperatures, cylinder space, and how much pipework has to change.

Does it actually pay? The honest version

This is where we have to be straight with you, because a heat pump's running cost is not automatically cheaper than gas. A heat pump is efficient — it moves heat rather than burning fuel — but electricity costs considerably more per unit than gas. On a standard tariff, the current electricity price cap works out around 24.67p/kWh (it resets every quarter and standing charges apply on top — always read your actual bill).

The running-cost case usually only stacks up well when two things are true:

• Your home is reasonably well insulated, so the heat pump runs at low flow temperatures and high efficiency.
• You move onto a smart heat-pump tariff such as Cosy Octopus, which offers cheaper windows tuned for heat-pump use, rather than paying the flat cap rate for every unit.

Here's the catch. If your house is poorly insulated, or you stay on a standard tariff, a heat pump can cost more to run than your old gas boiler — even with £7,500 off the install. For some households the honest answer is: insulate first, or the numbers simply don't work yet. For an off-gas home currently on expensive oil or LPG, the case is usually far stronger — you're displacing a pricier fuel, and the grant is £9,000 rather than £7,500.

How to test it for your home before committing

Before you sign anything, get clear on:

• Your actual electricity unit rate and standing charge (from your bill, not the cap headline).
• A proper heat-loss survey and the flow temperature the pump will run at — this drives efficiency and therefore running cost.
• Whether your radiators need upsizing, and what that adds to the full price.
• Which smart tariff you'd move to, and its current rates — these change with 30 days' notice, so verify them.
• Your EPC and any obvious insulation gaps worth fixing first.

Only once you have those numbers can anyone say honestly whether a heat pump pays for you — or whether your money is better spent on insulation this year and a heat pump later.

We don't sell heat pumps, we don't install them, and we take nothing from any installer — not even the referral fee the "free" comparison sites quietly collect. We charge one small fixed fee to model your house and your bills, and tell you the truth: whether the £7,500 grant makes a heat pump a clear win for you, or whether it doesn't pay yet. That's the whole job.

Figures in this guide are current at the date of publication and indicative only — SEG/export rates change with 30 days' notice, the Ofgem price cap resets quarterly, and grant terms change. Confirm the current numbers for your situation before you commit. This is general information, not personal financial advice.