The Boiler Upgrade Scheme explained (2026 guide)

The Boiler Upgrade Scheme (BUS) gives you £7,500 off the cost of an air source heat pump. With a typical installed cost of £10,500 to £15,500 before the grant, many Dorset homeowners end up paying a good deal less than they expect. You do not apply yourself: your MCS certified installer applies and takes the grant straight off your quote.

This guide explains who qualifies, how the process works, what the grant does not cover and the common mistakes to avoid.

How much is the grant?

The grant for an air source heat pump is £7,500. Until March 2027, homes heated by oil or LPG that have no mains gas connection can get £9,000, which suits much of rural Dorset. It is a fixed amount, not a percentage, so it covers a bigger share of the bill for smaller homes. It is a grant, not something you pay back.

Heat pumps fitted to homes also have 0% VAT until 31 March 2027, which helps on top of the grant.

Who is eligible?

In broad terms, you can get the grant if:

• Your home is in England or Wales. Scotland and Northern Ireland have their own schemes.
• You own the property. That includes homeowners, landlords and small businesses that own the building.
• You are replacing an existing heating system such as a gas, oil, LPG or electric one. Many villages in rural Dorset are off the gas grid and rely on oil or LPG, which makes them a good fit for the scheme.
• You do not need an EPC any more. Since April 2026 a valid Energy Performance Certificate is no longer required, and the old rule about outstanding loft or cavity wall insulation recommendations was dropped in 2024. If your home has an EPC, your installer will still use it, otherwise they provide other evidence such as a fuel bill.
• The heat pump is installed by an MCS certified installer and meets the scheme’s technical standards.

Some homes are not eligible or need extra checks:

• New builds are generally excluded, because new homes should be built with low carbon heating already. Self builds can qualify, with the right evidence.
• Homes that have already had government funding for a heat pump or biomass boiler are excluded.

The scheme’s rules have changed several times since it launched, so treat this as a guide. Your installer will check your eligibility against the latest Ofgem rules before you commit.

How it works, step by step

1. Get a survey and quotes. An MCS certified installer visits, carries out a heat loss survey and designs the system. You can compare up to 3 quotes through us.
2. Agree a quote. The quote should show the full price, the grant taken off as an upfront discount, and what you pay.
3. Your installer applies. The installer submits the grant application to Ofgem, which runs the scheme.
4. You confirm with Ofgem. Ofgem emails you to check that you agreed to the installer applying for you. Reply promptly, as the application can stall without your confirmation.
5. Installation. Once the application is approved, the work goes ahead within the time Ofgem allows, currently 120 days.
6. Commissioning and redemption. After installation, the installer registers it with MCS and claims the grant from Ofgem. You pay the balance as agreed.

What the grant does not cover

The grant is a fixed sum towards the heat pump installation. It does not automatically cover everything your home might need:

• Insulation and draught proofing. These often make a big difference in older homes but are separate work.
• Larger radiators. Some older homes need bigger radiators, which can add around £500 to £3,500. Many installers include this in the heat pump quote, but check.
• Building work beyond the installation, such as a new concrete base in a tricky spot or decorating afterwards.
• Solar panels or batteries. These are separate, though they pair well with a heat pump.

If your household is on a lower income, you may also be able to get help through a Warm Homes: Local Grant, which can cover insulation, heat pumps and solar. In Dorset it is run through Dorset Council and BCP Council.

Typical cost before and after the grant

As a rough guide, heat pump installations in Dorset tend to fall into these bands before any grant:

• Smaller homes such as flats, terraces and small semis: £10,000 to £12,500
• Typical semis and detached homes: £11,000 to £14,500
• Large or older detached homes: £13,500 to £18,000

Take £7,500 (or £9,000 for off gas oil and LPG homes) off whichever band fits your home to get a rough idea of what you would pay. Our heat pump estimate does this for you and also gives a rough idea of running costs. If payment comes up, ask your installer about payment options.

Common pitfalls

• Signing up before you check the installer is MCS certified. Without MCS, there is no grant. Check the installer on the MCS website yourself. Our guide on how to choose an MCS installer explains how.
• Missing the Ofgem email. Check your spam folder if your installer says the application is waiting on you.
• Removing your boiler too early. The scheme expects the heat pump to replace your existing heating. Talk to your installer before making changes.
• Paying a large deposit up front. The grant goes to the installer, so there is rarely a good reason to hand over a big sum before work starts.
• Skipping the heat loss survey. A proper survey makes sure the heat pump is the right size, which affects comfort and running costs.
• Assuming a listed or thatched home cannot have one. Many can, with care. Read are heat pumps worth it in older homes for the honest view.

Is it worth applying?

If you heat your home with oil or LPG, which is common in villages around places like Dorchester and Sherborne, a heat pump can often reduce running costs. Typical savings are £100 to £450 a year compared with oil and £300 to £1,050 a year compared with LPG. Against mains gas the picture is closer, at around -£100 to £500 a year, so tariff choice and a good design matter more. You can read more about air source heat pumps in Dorset.

Next steps

Try our free heat pump estimate to see a rough cost after the £7,500 grant. Then request quotes and we will pass your details to up to 3 local MCS certified installers, who will check your eligibility and handle the application.