When RHI finishes on 31st March 2022 it will be replaced by the new Boiler Upgrade Scheme (BUS) which commences 1st April 2022 and will run until April 2025.

The New Boiler Upgrade Scheme (BUS) is a UK Government-run Scheme that aims to help existing small domestic buildings transition to low carbon heating systems for heating their homes. The scheme will come into effect from 1st April 2022 and will replace the Renewable Heat Incentive (RHI) which finishes on the 31st March 2022. This new heat pump grant will provide an up-front sum of £5,000.00 for Air Source Heat Pumps and £6,000.00 for Ground Source Heat Pumps in the place of the £7,000.00 currently paid by RHI quarterly over seven years, to help homeowners in England and Wales to afford the upfront costs. The £450m policy was confirmed in the Heat and Buildings Strategy and the government has confirmed that the scheme will be a formal renaming of what was previously the “Clean Heat Grant”.

Around 14% of the UK’s carbon emissions comes from heating our homes, the Committee on Climate Change (CCC) says, and the Boiler Upgrade Scheme (BUS) will be a key driver to help the UK reach its net zero target in 2050 and to ensure all new heating system installations will be low carbon by 2035. The government says that a “Proportionately higher grant level in relation to overall costs has been set for Air Source Heat Pumps given that the majority of existing properties are suitable for this technology”. The scheme will operate similarly to the Green Homes Grant Scheme whereby the government will contribute a fixed sum towards the costs of a renewable heating system and the homeowner will have to pay the rest. In its consultation response to the scheme, the government has proposed a first come, first served basis to those who meet the eligibility criteria

Applicants will have a set validity period to ensure the vouchers are utilised in a timely manner and that unused vouchers can be recycled.

The validity period will be three months for Air Source Heat Pump and Biomass Boiler vouchers and six months for Ground Source Heat Pump vouchers.

How To Apply

While we don't yet know the precise details on how applying for grants will work, the government has proposed two stages of application:

  • Applying for the voucher — this will be led by the homeowner, and would take place before installation of a heating system
  • Redeeming the voucher — this will be led by the installer, which will confirm proof of the installation and process the completed paperwork

The government says it will "work closely with the scheme administrator on the detailed design of the administration and digital solution to ensure it works for all users.

Which Heating Systems Are Eligable?

The following types of heat pumps will be supported:

  • Ground Source Heat Pumps?
  • Water Source Heat Pumps (which the government considers in the same tech category as GSHPs)
  • Air Source Heat Pumps

Biomass boilers will be supported, but only in rural areas with populations of 10,000 people or less. They won’t be offered to people in urban areas.

Systems with a total capacity of up to 45kW will be eligible for the scheme.

Who Will Be Eligible?

All homeowners, small landlords and private landlords will be eligible to apply for grant.

However, all applicants must have a valid Energy Performance Certificate (EPC) - typically one which has been issued in the last 10 years - with no outstanding recommendations for loft or cavity wall insulation.

Applications may still be made by homeowners with outstanding recommendations for loft or cavity wall insulation, providing it is evidenced through a newly generated EPC at the voucher redemption stage that the installation of these types of insulation has been carried out during the voucher validity period.

Who Won't Be Eligable?

Anyone living in a new build and social housing will not be eligible for support under the scheme.

Which Systems Won't Be Covered?

Support will be available to installations providing space and water heating in buildings, but the grant will exclude:

  • Hydrogen boilers (which aren't expected to be available by the time the scheme ends)
  • Hybrid heat pumps

Solar thermal will not be directly supported. However, solar thermal systems can be installed as part of a heat pump or biomass system that is funded on the scheme, providing the heating system can meet the full space and water heating requirements of the home.

Custom and self build homes will be eligible for the Boiler Upgrade Scheme (BUS), the government has confirmed. Self-builders will be given a three-month validity period to complete their installations and will not have to provide an EPC to evidence insulation eligibility.

How Much Do Heat Pumps Costs?

Boris Johnson said in July that the cost of heat pumps is currently too high, and the Heat and Buildings Strategy has set out plans to ensure low-carbon heating systems cost the same to buy and run as fossil fuel boilers by 2030.

Currently, though, a basic ASHP can cost upwards of £1,600 for a small air source mono block unit, to around £14,000 for a top end large capacity fan unit. A basic ground source heat pump can cost between £2,000-£15,000 depending on size and brand.

Biomass boilers, another renewable alternative, can cost anywhere from £11,000 to £25,000.

The government expects to see cost reductions during the lifetime of the scheme, and homeowners who install a heat pump on the scheme could end up paying a similar amount as if they were installing a traditional natural gas boiler.

Why The Focus On Heat Pumps?

Heat pumps are an environmentally friendly alternative to gas boilers for heating our homes.

They extract heat from the environment, even at low outside temperatures and can produce around three times the energy they use, making them much more efficient than a gas boiler and unlike gas boilers, heat pumps do not produce carbon when operating.

How Will It Differ From RHI?

The Domestic RHI launched in April 2014 and has provided payments for the generation of renewable heat from eligible renewable heat technologies. The scheme will end on 31 March 2022 and the Boiler Upgrade Scheme (BUS) will take its place from April 2022.

The RHI has operated through tariff-based support, where payments differ between properties in accordance with the efficiency of the property. Payments are made on a quarterly basis over a seven-year period after the system has been installed. The Boiler Upgrade Scheme (BUS) will replace this funding with a flat-rate payment.

Is It Available Across The UK?

The scheme will only be available in England and Wales. If you live in Scotland, you can access funding to make energy-efficient home improvements through Home Energy Scotland.

Reaction To The Scheme

The “Clean Heat Grant” had originally proposed a fixed-sum payment of £4,000 for homeowners however it was highlighted that the £4,000 per installation grant originally consulted upon may not be sufficient to close the affordability gap. When the Scheme was renamed Boiler Upgrade Scheme (BUS) it was thought £5,000.00 for an Air Source Heat Pump and £6,000.00 for a Ground Source Heat Pump was more realistic.

What Other Funding Is Available?

If you are ineligible for funding on the scheme, you might be able to benefit from the Energy Company Obligation (ECO), a scheme designed to help low-income and vulnerable households make energy-efficient home improvements.

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