Boiler Upgrade Scheme Offers €5,000 Grant Support for Heat Pump Installations

Boiler Upgrade Scheme: A Comprehensive Guide

The Boiler Upgrade Scheme, previously the Clean Heat Grant, launched on April 1st 2022. The scheme supports the deployment of low carbon heating by providing grant subsidy (primarily for heat pumps) and comes into place following the closure of the Renewable Heat Incentive. It will apply to qualifying low carbon heating systems installed on or after April 1st.

What is it?

The Boiler Upgrade Scheme was originally announced as the Clean Heat Grant. It is an incentive scheme that will be available in England and Wales and will provide grant funding to support the installation of low carbon heating systems in homes and some non-domestic buildings.

How much can you receive?

The Boiler Upgrade Scheme will provide grants of £5,000 for air source heat pumps and biomass boilers. Ground source heat pumps will receive a higher £6,000 grant.

In designing the Boiler Upgrade Scheme, the government has gone for a simple and easy to understand system. The scheme will offer a single grant level for each technology type and will not vary with system capacity. It is hoped that this will be easier to understand and administer and avoid some of the problems experienced with previous grant schemes in the clean energy space.

When does the Boiler Upgrade Scheme start?

The Boiler Upgrade Scheme launches on April 1st 2022 but won’t open for grant applications and payments until May 23rd. What does that mean for you if you are considering a heat pump?

  • Qualifying eating systems that are installed and set up (commissioned) on or after 1st April 2022 will be entitled to support under the Boiler Upgrade Scheme.
  • From the 11th April, installers will be able to set up an account for the scheme with Ofgem. Ofgem will be administering the scheme.
  • On 23rd May 2022 the scheme will open for grant applications and payments.

Who qualifies for the boiler upgrade scheme?

The Boiler Upgrade Scheme will support installations of certain renewable heating systems in England and Wales. It is primarily targeted at domestic installations and is designed for circumstances where the clean heating system will replace an existing fossil fuel or electric system. It is not designed for new builds but is available if you are building your own home.

The grant will primarily fund heat pump installations with funding for biomass only supported in limited circumstances and only in rural areas.

You must own your own home and have a valid EPC (Energy Performance Certificate).

Eligibility Criteria

  • System will have a capacity limit of 45 kWth
  • Must replace existing fossil fuel or direct electric systems, except in the case of custom-build properties
  • Heat pumps must have a minimum SCOP of 2.8
  • Biomass systems only supported in limited circumstances
  • Property will need a valid EPC showing no recommendations for loft or cavity wall insulation

Biomass boilers will only be supported in rural areas and where they replace existing fossil fuel systems, where that system is not fuelled by mains gas, or direct electric systems. The Boiler Replacement Scheme will not support fossil fuel hybrid systems or systems used for process heating.

Technologies

The scheme is available for the following low carbon heating technologies:

  • Air source heat pumps – €5,000
  • Ground source heat pumps – €6,000
  • Biomass boilers – €5,000

How it works

The installer applies for the grant on your behalf and the value of the grant is discounted from the amount you pay.

The first stage in the process is to find an installer and agree a quote. It is recommended that you get quotes from multiple installers at this stage. This helps ensure that you get value for money but also that you can find the right person for the job. The installer must be MCS certified for the technology that you are installing.

When you have found an installer and agreed a quote, the installer will apply for the grant on your behalf. You will then need to confirm to Ofgem that the installer is acting on your behalf.

Vouchers under the Boiler Replacement Scheme will be valid for a limited period of time. for air source heat pumps and biomass, this will be 3 months. For ground source heat pumps the validity period will be 6 months. This time limit is there to prevent speculative applications while allowing time for completion of the installation.

The installer has to provide a quotation at the voucher application stage, prior to installation in order to assure that the customer has been consulted on the installation and is aware of the likely cost. While the application process is led by a single installer the advice is clearly to seek multiple quotes from different installers to ensure you are making an informed decision when you select your preferred installer.

Self building

The Boiler Replacement Scheme is available for existing domestic and small non-domestic properties where the system being applied for will replace an existing fossil fuel or direct electric system. New builds are not eligible except in the case of one-off custom builds. So if you are building your own home, the scheme should be available to you. It is not clear exactly how Ofgem will define what does and doesn’t count

The consultation document on the scheme stated the following:

“The scheme will provide capital grants to support the installation of ASHPs, GSHPs, and biomass boilers in domestic and non-domestic buildings. New build and social housing will not be eligible for support under the scheme, however domestic custom builds will be eligible.”

You should be able to confirm eligibility in your own case through your installer or Ofgem.

Where is the Boiler Replacement Scheme available?

The Boiler Replacement Scheme is only available in England and Wales. The Scottish Government already operates a comprehensive support package for domestic and small scale non-domestic heat and energy efficiency through Home Energy Scotland and the Energy Efficiency Business Support Service.

How much does a heat pump cost?

Our most recent air source heat pumps costs survey was published in early 2021. The complete installed cost for an air source heat pump is likely to be in the range of £10,000 to £14,000 and will vary depending on the heat pump but also on what if any additional works are required to complete the system. Smaller systems connecting to existing suitable distribution systems will be at the lower end of the range. Retrofit installations, where work is required to the internal distribution system tend to cost more and will likely be towards the higher end of the range. The mean estimate for a retrofit air source heat pump install in a typical UK home was £13,249.

Ground source heat pumps are substantially more expensive.

It is not unusual to see unrealistically low cost estimates for heat pumps online and in the media. It is important to note that the €5,000 grant available for air source heat pumps will reduce the cost of an install significantly but will probably cover less than half the cost of a typical install.

Finding an installer

The first stage in the process of the Boiler Replacement Scheme is finding an installer and a quote. Whether it is a heat pump or biomass, low carbon heating systems are a significant investment and it is important that you find the right people for the job.

The application process for the grant is installer led, i.e. the installer applies on your behalf and based on the quote you have agreed. But before you get to that stage, it is important that you take you time and find the right installer and the right quote for your needs.

Your installer must be MCS certified. Which should guarantee a certain level of competence and also should ensure that they are part of an accredited consumer protection scheme. Both prices and experience will vary widely among even accredited installers however so all the advice is clear that you should seek multiple quotes from multiple accredited installers before you settle on your choice.

You can find installers, check accreditations and request quotes from our installer directory in any of the following technologies: