What is the Boiler Upgrade Scheme?
The Boiler Upgrade Scheme is a new government incentive administered by Ofgem, designed to encourage homeowners to switch from fossil fuel boilers to low carbon alternatives such as heat pumps. It’s just one of the ways in which they are hoping to meet the net-zero emissions target by 2050.
With rising energy prices as well as increasing concerns over climate change and carbon emissions, heat pumps are already becoming a more attractive way to heat suitable homes than with a fossil fuel boiler.
However, one of the current barriers to switching to a heat pump can be the higher upfront cost in comparison to installing a boiler. This is where the Boiler Upgrade Scheme comes in, reducing the cost for eligible homes.
- A £7,500 voucher towards the purchase and installation of an air or ground source heat pump.
Because the scheme is installer-led, an MCS accredited organisation applies for the voucher on your behalf. You’ll pay the full cost of the system upfront, with the voucher redeemable once the installation has been completed and MCS certified.
Any remaining costs towards the installation are paid by the homeowner, and will vary depending on the type of heat pump chosen.
How much does a typical heat pump installation cost?
You can expect an air source heat pump system to cost in the region of £11,500, and for a ground source heat pump £15,000 – £20,000, depending on the groundworks required.
How much money has been made available for the Boiler Upgrade Scheme?
The government has allocated £450 million to the Boiler Upgrade Scheme with a cap of £150 million per year, which will see around 90,000 households benefit over three years.
Who is eligible for the Boiler Upgrade Scheme?
As the name suggests, the scheme is focused on encouraging existing properties to upgrade to a heat pump, instead of just installing another fossil fuel boiler.
Whilst the emphasis is on upgrading existing homes, self-builds are also eligible including small non-domestic properties, such as garages or workshops.
So whether you’re renovating or building your own property, you could still take advantage of the Boiler Upgrade Scheme.
What’s needed to qualify for the Boiler Upgrade Scheme?
- Your property and heat pump must be privately owned. To qualify for a Boiler Upgrade Scheme voucher, your property and the heat pump you are having installed must be owned by a private individual (or couple).
- Your heat pump must be replacing a fossil fuel system in an existing home. If the heat pump is being retrofitted into an existing property, it must be replacing a fossil-fuel fired heating system such as a boiler or a direct electric system such as night-storage heaters, and cannot be replacing an older heat pump.
- Your heat pump will need to provide all the heat required. The heat pump must be able to provide all the heating and hot water needed for the property, meaning no boiler or oil-filled system can be present. Localised heat sources such as plug-in electric heaters or wood burning stoves are allowed, but can’t be factored into the calculations used to size the heat pump to the property.
- Your heat pump must be eligible for the scheme. To be eligible for a voucher, the heat pump needs to be MCS approved and able to achieve a minimum COP (coefficient of performance) of 2.8. This means that choosing the right heat pump and system design that will be able to efficiently heat your home is critical.
- For existing homes, you’ll need a valid EPC less than 10 years old. If your project is a retrofit, there needs to be a valid EPC on the property that’s less than 10 years old and has no recommendations for cavity wall or loft insulation. This is because the scheme is designed for well-insulated properties that will actually be able to benefit from a low-temperature heat source such as a heat pump. You can see whether your home is suitable for a heat pump with our Heat Pump Suitability Checker.
- New-builds will need a planning application reference. Whilst you won’t need an EPC if you’re installing a heat pump in a new build (known as a self-build within the scheme), you will need to provide the planning application reference instead.
- No history of previous energy grants. Lastly, it’s worth noting that if your property has already had an energy grant applied to it, such as the Renewable Heat Incentive (RHI) or Energy Company Obligation (ECO) funding, it won’t be eligible for the Boiler Upgrade Scheme.
Wondering if a heat pump is right for your home?
Find out in four easy steps with our quick suitability checker.
How can I take advantage of the Boiler Upgrade Scheme with Nu-Heat?
When you choose a Nu-Heat system, our MCS accreditation means we can apply for the Boiler Upgrade Scheme voucher from Ofgem on behalf of you and your installer*.
Once the voucher application has been approved by Ofgem, you and your installer will have a set period of time to install the heat pump and arrange with us to be able to commission and MCS certify the heating system before the voucher expires.
Air source heat pump vouchers (£7,500) are valid for 3 months whereas Ground source heat pump vouchers (£7,500) are valid for 6 months.
We’ll ask for the full cost of your system to be paid before delivery, and once your voucher has been redeemed, we will credit the grant back into your account.
* If you choose to use a MCS accredited installer, they will handle all aspects of your voucher application.
A step-by-step guide to receiving your Boiler Upgrade Scheme voucher
Step oneWe’ll check you’re eligible before you order.
Before we design your system, we’ll gather some important information from you to make sure you’re eligible for the Boiler Upgrade Scheme, including:
- • The property’s previous heating fuel (gas, electricity, oil)
- • Is your home connected to the gas grid?
- • Planning application reference (new builds only)
- • A valid EPC* (existing homes only)
- • Approximate cost of the heat pump installation** (not including heat pump)
- • Your contact and address details
* A valid EPC must be less than 10 years old and have no recommendations for cavity wall or loft insulation
** This is cost of installing the heat pump, not including the heat pump itself. Please note, the installation cost is not subject to checks by Ofgem, and there will be no penalties if the final amount paid is more or less than this figure.
Step twoWe’ll time your voucher application with your heat pump delivery.
Timing your application right is important to make sure the system is delivered, installed, commissioned, and MCS certified in time to be able to redeem your voucher before it expires (12 weeks for ASHPS and 24 weeks for GSHPs).
To give you as much time as possible, we’ll apply for your voucher roughly three weeks before the agreed delivery date of your heat pump. This should give you the maximum amount of time to get your heat pump installed and signed-off before your voucher expires.
Keep an eye out for Ofgem’s application confirmation email
Once Ofgem receive your voucher application from us, they will contact you by email to confirm the application details are accurate, and that you’re happy to proceed. Although Ofgem allow you 14 days to respond, we recommend regularly checking your inbox and confirming as soon as possible to prevent unnecessary delays.
How do I know my voucher application has been approved?
Ofgem will inform both you and us whether or not the voucher application has been approved. This can take up to 15 working days, depending on Ofgem’s processing times. Once your voucher application has been approved by Ofgem, we will deliver your heat pump.
Step threeYour installer fits your heat pump. We’ll visit to commission it.
Once your voucher application has been approved, your heat pump will need to be installed, commissioned and certified before the voucher expires (12 weeks for an air source heat pump and 24 weeks for a ground source heat pump) so it’s important to minimise delays where possible.
Allow 4-5 weeks for the installation of an air source heat pump and up to 16 weeks for a ground source heat pump.
Make sure your installer is ready to fit your heat pump as soon as it is delivered so that you have enough time to have the system commissioned and certified. After installation of your heat pump, there is typically 7-8 weeks remaining before your voucher expires.
Allow 3 weeks for commissioning
After you’ve had your heat pump installed, you can contact us to arrange a commissioning visit.
During the visit, one of our Field Engineers will come out to you to check the heat pump installation meets MCS standards, and highlight any non-conformities preventing MCS certification.
It’s important to keep in mind that the average lead time for arranging commissioning visits is 3 weeks. This leaves around 4 weeks remaining before your voucher expires.
Allow 2 weeks for any non-conformities to be rectified
If your heat pump installation doesn’t meet MCS standards, any issues (referred to as non-conformities) need to be rectified by the installer. Once these issues have been sorted, we’ll just need some photos as evidence for MCS certification.
Allowing 2 weeks to have any installation issues fixed gives you a final 2 weeks for certification of your heat pump before your voucher expires.
Allow 2 weeks for MCS certification
MCS certification can take up to two weeks during busy periods, so it’s important to allow enough time for this key stage before your voucher expires.
Step fourWe’ll redeem your voucher with Ofgem, and pay you the grant.
As soon as we’ve successfully commissioned your heat pump installation to MCS standards, we’ll be able to apply to Ofgem for redemption of your awarded voucher, which will take around 12 working days.
When will I receive my voucher?
Ofgem will contact you for confirmation and notify both you and us once approved.
Payment of the grant will be submitted to Nu-Heat after 7 working days, and we will credit you the value of the voucher using the same method you used to pay for your heating system.
Ofgem has set a validity period of 3 months for air source heat pump vouchers and 6 months for ground source heat pump vouchers. These voucher validity periods begin once Ofgem has approved the voucher application.
Should your voucher expire before your heat pump is commissioned and MCS certified, you will need to arrange with us to submit another application for the grant, putting you to the back of Ofgem’s processing queue. This is because Ofgem processes voucher applications in batches.
Whilst this might just mean a delay to receiving the grant, there is also a chance that funds may be unavailable by the time your second voucher is redeemed. The government has capped the amount of money available for vouchers each year, so it is not clear whether the scheme could be either temporarily or permanently closed if the scheme’s funding allocation is reached.
This is one of the reasons why it’s important to make sure you get your heat pump installed as soon as possible, once it’s been delivered. By minimising delays early on, you will give you and your installer as much time as possible should installation and commissioning take longer than expected.
As it stands, the renewable heat sources available on the Boiler Upgrade Scheme are air source heat pumps, ground source heat pumps and biomass boilers. 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 new scheme covers fewer technologies than its predecessor, the Renewable Heat Incentive (RHI), which also provided payments for the installation of solar thermal systems.
The Boiler Upgrade Scheme is different to its predecessor, the Renewable Heat Incentive, as it offers a voucher to lower the cost of installing a heat pump. Provided your voucher is redeemed before it expires, the grant is paid into your account within a few weeks of your heat pump being MCS certified.
The RHI, in comparison, was a tariff based scheme that provided quarterly payments over 7 years based on the energy the system produces.
For many average sized homes looking to install an air source heat pump, the Boiler Upgrade Scheme is a strong incentive. You benefit from an initial saving of £5,000, rather than receiving a similar amount spread out over a 7 year period. It’s an instant saving that you benefit from immediately, which makes renewable heating more accessible.
For larger properties, and those looking to install a ground source heat pump, the return is likely to have been better with the RHI over time, but for many, the idea of a lump sum offered by the Boiler Upgrade Scheme is more appealing.
For expert advice on underfloor heating and renewables, contact us today.