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Boiler Upgrade Scheme: how does it work?

What is it?

The Boiler Upgrade Scheme is the government’s latest incentive to encourage homeowners to fit low-carbon heating systems such as heat pumps. It’s a grant payable in England and Wales for installations in domestic and some non-domestic properties, targeting up to 90,000 homes over three years.

The scheme, worth £450 million, is administered by Ofgem and is due to run until 2025. Low-carbon heating systems commissioned on or after 1 April 2022 are eligible, subject to the conditions below. Voucher applications open on 23 May 2022 but installers can open an account with Ofgem now.

Note: installers have to apply for the grant on behalf of the customer; your customer can’t apply for it.

How much?

• £5,000 off the supply and installation cost of an air source heat pump • £5,000 off the supply and installation cost of a biomass boiler* • £6,000 off the supply and installation cost of a ground source heat pump.

*Only in properties not currently connected to the gas grid.

What is eligible?

• Homes and small non-domestic properties in England and Wales are eligible. The maximum installation capacity is up to 45kW and with a minimum CoP of 2.8 • The low-carbon heating system must fully replace an existing fossil fuel system such as oil, gas or direct electric • The new installation must meet the property’s full heating and hot water requirements • Installed products must meet approved standards • The property must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation, unless it is exempt* • The commissioning date must be on or after 1 April 2022.

*Applications may be made as long as insulation is installed before the voucher is redeemed.

Mixed reactions as industry takes stock

Mark Wilkins, technologies and training director at Vaillant, says: “Consumers are one of the pivotal pieces of the jigsaw puzzle for achieving decarbonisation in the UK, so any mechanism put in place to increase consumer uptake of mass heat pump deployment is a positive step towards achieving the UK targets.

“However… the downside to the BUS is that it complicates the installer process and provides a hiatus of up to seven weeks, between the RHI closing on 31 March and applications for BUS vouchers opening on 23 May.

“While installations commissioned on or after 1 April may be eligible for the BUS, this almost two-month delay has the potential to be hugely damaging within the heating industry, especially to our installers, many of which are SMEs who do not have the available cashflow to wait weeks for reimbursement via an issued voucher.”

Don’t forget about gas

Drayton cautiously welcomed the initiative but warned that homes that still rely on gas must not be forgotten in the drive to reducing carbon emissions.

Managing director Remi Volpe says: “While the launch of the Boiler Upgrade Scheme will help to increase the number of heat pump installations, we must think about what can be done to reduce carbon emissions from those homes with gas boilers who are not yet ready to make the switch.

“Additionally, it’s important that the industry looks at how we are going to develop the skilled workforce to meet this growing customer demand. To meet the government’s predicted level of heat pump installations, more than 50,000 installers will need to be supported in upskilling to be able to install low-carbon heating systems.”

What about hybrids?

At Baxi, managing director Karen Boswell says the role that hybrids could play in decarbonising home heating has been left out of the equation. “Fitting [heat pumps] in the UK’s existing housing stock often requires substantial modifications to the property. The government should be looking at hybrids, where a specially adapted heat pump works alongside the home’s existing or new gas boiler. “Hybrids could reduce gas usage by up to 70 per cent and have been proven to be effective. Yet this relatively simple, easy-to-install option is almost non-existent in the UK. This is unlikely to change soon because hybrid heat pump systems will not be eligible for the BUS.

“The government is taking a very purist approach by not incentivising hybrids. By not offering grants for such installations, it could be preventing existing homes across the UK from accessing efficient, low-carbon heat.”

Rachel Salisbury with son Jasper and the British Gas engineers who fitted the Daikin heat pump at her Hungerford home

The first heat pump has already been fitted and commissioned under the scheme. A Daikin monobloc heat pump went into the home of a British Gas customer in Hungerford, alongside a Mixergy smart hot water cylinder.

Centrica has pledged to fit up to 1,000 air source heat pumps this year, rising to up to 20,000 a year by 2025, with British Gas and Daikin forming a new partnership

Henk van den Berg, Daikin UK’s strategic business manager, Heating & Renewables, says: “It’s vital that those making the swich to heat pumps have an excellent experience during the installation and in the weeks, months and years that follow. Then they can spread the word and encourage others to follow suit.”

Scheme: how does it work?

What is not eligible?

• Social housing and new-build properties, except for self-build • Hybrid heating systems • Biomass boilers where the property is already connected to the gas grid • Replacing an existing low-carbon heating system • Property that has received funding previously for RHI, Green Homes Grant or any other government subsidy for low-carbon heating.

What should gas engineers do?

• Installer must create a BUS account with Ofgem, which will verify their ID and eligibility • Installer must receive instructions from the homeowner to carry out the installation and apply for the grant • Apply for the voucher, including information about the type of low-carbon heating system and the customer’s contact details • Once Ofgem has assessed the application and contacted the homeowner to confirm their consent, a voucher is issued to the installer • When the installation is complete, installers must provide evidence of the installation to Ofgem in order for Ofgem to assess the redemption voucher • Ofgem will pay the grant to the installer within a week of notification that the application has been successful.

Additional requirements

• Installers must be both MCS certified and a member of a Consumer Code • Installers must provide evidence of MCS certification opening their Ofgem account and submit MCS certificates when the voucher is redeemed • Installers must keep all information for six years.

Consumers

• Find an MCScertified installer • Agree a quote • Confirm that the installer is working on their behalf when contacted by Ofgem.

You can find out more at: www.ofgem.gov.

uk/publications/ bus-accountcreation-guidance