How to apply for the £5,000 Boiler Upgrade Scheme

Looking to upgrade your boiler to an eco-alternative? Here’s how to get a £5,000 grant to help with costs as applications open this month

a person checking the temperature of a radiator
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The latest energy price cap means homeowners on standard or default tariffs could be paying an average of 54% more for typical gas and electricity usage. Replacing your boiler with an eco-alternative could help - and there's financial help too for anyone looking to switch.

Homeowners looking to cut energy bills and help the environment too could save £5,000 by switching to an eco-alternative heating system, like an eco heat pump, with the government's Boiler Upgrade Scheme.

The scheme, which replaces the Clean Heat Grant, will open to applications and payments from 23 May. Homeowners looking to take advantage will need to apply via an authorised installer (we explain this in more details below). 

However, the scheme does not cover the entire cost of a new low carbon heating system. On average, an air source heat pump costs around £10,000 to buy and install, according to the Energy Saving Trust, meaning households will have to stump up the cost for the rest.

But with rising energy costs, it may be worth taking advantage of the scheme to cut down on energy bills in the long term. Not only may it save money in the future, but you’ll be cutting back your household’s carbon footprint for years to come. 

WHO IS ELIGIBLE FOR THE BOILER UPGRADE SCHEME? 

To be eligible, you must live in England or Wales and own your property, which must have an installation capacity of 45kWth and a valid Energy Performance Certificate. Your installer will be able to advise you on whether your property is suitable.

New build properties are not eligible for the payment, unless you are building your own home.

HOW DO I APPLY FOR THE BOILER UPGRADE SCHEME?

To apply for the boiler upgrade scheme, you must:

*First find an MCS certified installer in your area (opens in new tab) that is able to carry out the work. The MCS quality assurance scheme ensures that installers are competent, and the products they use meet the correct standards.

*The installer will then advise you on whether an installation is eligible for a grant and will provide you with a quote for the installation. 

*The installer applies for the grant on your behalf. 

*Ofgem, the energy regulator, will contact you to confirm that the installer is taking part in the scheme.

The scheme will run until 2025.

WHAT DOES A BOILER UPGRADE SCHEME MEAN FOR A GAS BOILERS BAN?

Gas boilers could be banned from 2035 to make homes more eco-friendly and halt climate change. 

The average cost of an eco-friendly alternative is £10,000, though there is the hope that this price can be lowered to around £5,500 if manufacturers make more of them. With a grant on top, the cost of an eco-heat pump could be lowered to £500 - a more affordable prospect for most people.

The government has set aside £450m to pay for £5,000 grants under its new Boiler Upgrade Scheme.

WHAT IS AN ECO-HEAT PUMP? 

Heat pumps transfer heat or warmth from one place to another. For example, heat from the soil in the garden to the hot-water system in the house. Compared to a boiler, a heat pump only uses a small amount of electricity - often achieving a 200%-600% efficiency rate because the amount of heat produced is higher than the energy used. Plus, more than half of UK electricity is already low carbon.

Currently, around 35,000 heat pumps are installed every year. The government aims to fit 600,000 heat pumps a year by 2028.

WHAT ARE THE ADVANTAGES OF AN ECO-HEAT PUMP? 

The eco-heat pump will cut the UK’s greenhouse gas emissions. At present, about 25 million homes in the UK are heated by natural gas. This household energy use accounts for 15% of the country’s greenhouse gas emissions.

As well as the obvious benefit to the planet, an eco-heat pump will reduce your energy bills. A four-bedroom house, for example, could expect to save £1,300 on their heating bills, according to tradesperson platform Rated People.

This could be good news for households facing shocking rises in their energy bills looking for ways to cut energy costs.

WHAT ARE THE DISADVANTAGES OF AN ECO-HEAT PUMP?

Installing a heat pump can be very disruptive and requires a considerable amount of space. Large hot water cylinders, more substantial radiators and better insulation are some of the unexpected extras that may come alongside an eco-pump installation.

Not only does this take up space in your home, but it is costly, can take a long time and may disrupt your day-to-day life.

WHAT ABOUT HYDROGEN-READY BOILERS?  

The hydrogen-ready boiler is a cheaper alternative to the eco-heat pump, costing around £2,000. It is also less disruptive to install than the eco-heat pump and can be slotted into the same space as an old gas boiler. 

Although there are concerns that the hydrogen-ready boiler may never deliver any actual carbon saving. That’s because this type of new boiler needs hydrogen from low carbon sources to be available in the local grid and there are still issues about the practicality and cost of this. There are also safety concerns surrounding its use. 

HOW DOES THE BOILER UPGRADE SCHEME WORK? 

The £450m Boiler Upgrade Scheme will run until 2025 by which time the government hopes the cost of heat pumps will fall by half. 

The scheme has already been criticised by environmental campaigners who point out the £450m set aside will only lead to 90,000 heat pumps being installed.

ARE GAS BOILERS BEING BANNED? 

The Boiler Upgrade Scheme is part of the government’s bigger plan to make the UK greener and reach net-zero emissions by 2050.

Gas boilers will be banned in all new-build homes from 2023 - two years earlier than planned - and boilers could be banned from 2035 with the possibility of fines for homeowners who do not meet the new rules.

Katie is staff writer at The Money Edit. She was the former staff writer at The Times and The Sunday Times. Her experience includes writing about personal finance, culture, travel and interviews celebrities.  Her investigative work on financial abuse resulted in a number of mortgage prisoners being set free - and a nomination for the Best Personal Finance Story of the Year in the Headlinemoney awards 2021.

With contributions from