News has been published this week that suggests the Boiler Upgrade Scheme is at risk of funding cuts. According to The Guardian, sources indicate that the money currently invested by the Government could be diverted to the defence budget instead.
The grant, which currently offers homeowners up to £9,000 towards the costs of switching from a fossil fuel-led heating system to a heat pump, has seen over 151,000 applications since its launch in 2022.
If the claims are true, it could have a worrying impact on homeowners currently looking for ways to save money on their ever-rising heating bills.
What does the Boiler Upgrade Scheme cover?
The Boiler Upgrade Scheme (BUS) is available to UK residents looking to change their current heating system. It doesn't apply to new self-builds, rather those homeowners living in existing homes who are considering ways to reduce their reliance on gas, oil or LPG.
The grant, which covers air source and ground source heat pumps, was increased to up to £9,000 in July 2026 and also extended to include a £2,500 grant for air-to-air heat pumps which both heat and cool your home.
Approved heat pump installers apply for the grant on your behalf, helping to reduce your heat pump costs.
What cuts are proposed?
Although details of the exact figures and how the cuts will work have not yet been officially announced or confirmed, The Guardian states that: "Miatta Fahnbulleh, the energy secretary, has been tasked with finding more than £2bn in savings from her budget to help pay for defence investment under a plan drawn up by the previous government.
"Sources say a portion of those savings will come from cutting the Boiler Upgrade Scheme for England and Wales.The programme will not be abolished altogether but sources say hundreds of millions of pounds will be cut from its £2.7bn budget."
Heat pump experts express concern
Despite asking our own sources if the claims are true, at the time of writing no-one has been able to confirm or deny them. Industry leaders, however, have expressed concern that if the cuts are announced, they will cause damage to both homeowners, the climate and the growing UK heat pump industry.
Greg Jackson, founder and CEO of Octopus Energy, said: “Britain's exposure to gas cost the Treasury £80bn in the last energy crisis. The Boiler Upgrade Scheme budget is just 0.5% of that, and is key to getting off gas. It’d be remarkably short sighted to try to enhance our defence by cutting our path to security.
"It would also put thousands of skilled jobs at risk," he continued, "the very people making Britain safer and cleaner in every postcode.”
And, with demand for heat pumps not showing any signs of slowing down – Octopus say over 570,000 people have contacted the company about heat pumps in the last 18 months – the reality is, any cuts in funding could have a big impact.
Homebuilding & Renovating's energy expert, David Hilton, equally expressed concern about this latest news, stating that even if the source isn't correct, it will still impact the heat pump industry.
"This is not good news for the industry, and it's also not the first time that the government have looked to raid the Boiler Upgrade Scheme pot. Rachel Reeves did the same before her budget and then did a big U-turn after the backlash from industry.
"We do know that the BUS scheme is due to end in 2030, with the increased grant of £9,000 for oil and LPG replacement ending in March 2027," he continued, "so maybe this will be an indication of what is to come. I think that no one really knows the details and we will have to wait and see. But, this news will slow down any orders, and once again throw uncertainty into an already fragile industry.
"What we need is consistency and certainty and responsible leadership," said David. "If the BUS grant has to end, it needs to be a transition, not just an instant rug pulling exercise."
When asked if it knew anything else about the plans to reduce funding, the Heat Pump Association UK (HPA UK) were unable to offer any further details, but remain hopeful that the Government will remember the value of the Boiler Upgrade Scheme.
Chief executive, Charlotte Lee said: “While HPA UK does not comment on pre-Budget speculation, we understand that the Government is very aware of the critical role the Boiler Upgrade Scheme plays in giving industry the confidence to invest and scale up heat pump deployment towards the 450,000 per year ambition set out in the Warm Homes Plan. The electrification of heating is vital to delivering energy security, reducing carbon emissions and cutting consumer bills in the long term."
