Oil boiler owners could be offered grants of over £6,000 to switch to heat pumps

Installer putting heat pump in up a wall
A consultation by the government on the Boiler Upgrade Scheme is proposing offering homes with oil boilers over £6,000 grants to convert their homes from oil boilers to heat pumps (Image credit: Getty Images)

Proposed changes to the government's Boiler Upgrade Scheme could mean homes with oil boilers will receive larger grants than the £6,000 currently given out.

The proposals come amid talks of the government introducing an oil boiler ban to force rural homeowners to install either air source heat pumps or ground source heat pumps. Plans for an oil boiler ban have been met with significant opposition due to the costs involved, which these new grants will aim to rectify.

The consultation into the changes will also look to make it easier for homeowners to use the Boiler Upgrade Scheme, which has so far been hindered by a lack of certified installers.

What is the Boiler Upgrade Scheme?

To support with the upfront capital cost of a heat pump, the government launched the £450m Boiler Upgrade Scheme in May 2022.

Formerly known as the Clean Heat Grant, the Boiler Upgrade Scheme works similarly to the Green Homes Grant, which ended in March 2021, whereby the government contributes a fixed sum towards the cost of a renewable heating system.

The BUS provides grants of up to £6,000 for the installation of ground source heat pumps and, in limited circumstances, biomass boilers, and £5,000 for air source heat pumps, to encourage property owners to replace existing fossil fuel heating with more efficient, low carbon heating systems.

It operates a first-come, first-served basis to those who meet the eligibility criteria. 

The scheme officially launched on 1 April 2022 (although applications opened in November 2022), and all eligible low-carbon heating systems commissioned after this date will be entitled to support under the Boiler Upgrade Scheme. The scheme opened for grant applications and payments on 23 May.

What are the proposed changes to the scheme?

The government has consulted on plans to introduce regulations for properties with oil boilers to help phase out fossil fuel-reliant heating systems.

The government has recognised the cost of installing a heat pump is currently higher than fossil fuel alternatives for rural homes, which can be a significant barrier to installing heat pumps.

However, it has been suggested as part of the consultation that grant levels be varied depending on the type of property and/or its existing fuel source, which would mean homes with oil heating could receive larger grants than those currently offered to homes with gas boilers, which stands at a maximum of £6,000.

Other amendments to the Boiler Upgrade Scheme include:

  • Amending EPC requirements for homes
  • Removing requirements for loft or cavity wall insulation
  • Changing whether biomass boilers with a cooking function should be eligible under the scheme

Why is the government introducing this?

The government has introduced this policy following criticism of its oil boiler ban looking to ban new oil boilers in homes from 2026. The oil boiler ban was set to be included in the Energy Security Bill, which was due to be announced later this year.

However, the government faced significant opposition to this policy with accusations this would simply be an 'ULEZ' for rural homeowners, affecting 6% of UK households, forcing them to quickly find alternative heating solutions, and given that most of these households are not connected to the gas grid, they would have to explore oil boiler alternatives.

Over 30 members of the Conservative party, including former environment secretary George Eustice, voiced their concerns to the Prime Minister, Rishi Sunak, over concerns that the ban would seriously impact rural communities.

The consultation closing date will be the 12th October 2023 when the changes will be announced to the Energy Security Bill.

Joseph Mullane
News Editor

News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals.  Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.