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How should the Boiler Upgrade Scheme be reformed?

Rob of York · 2026-10-03T12:25:26Z

The Boiler Upgrade Scheme (BUS) is essential in encouraging the adoption of heat pumps for domestic space heating and hot water in the UK, however, in its current form the scheme has a number of drawbacks. There are a number of ways in which it could be improved that are discussed below. Background The Boiler Upgrade Scheme is paid for through general taxation. It provides grants of £7500 for Air-to-Water (A2W) and £2500 for Air-to-Air (A2A) heat pumps when they are installed as a replacement for a gas boiler. BUS grants are also available for replacing oil boilers and direct electric boilers, however, here we focus on gas. Existing electric supplementary heaters are permitted to stay in place e.g. electric towel rails, electric immersion heaters, etc. The output of the heat pump must cover the full space heating requirements of the property, and together with any supplementary appliances, it must also cover the space heating and hot water requirements of the property. The full regulations are here:How the scheme could be improved Technology agnostic At present, the amount of the BUS grant depends on the technology used rather than only on the desired outcome, i.e. low carbon heating. This situation should be avoided since it leads to a poor use of public money. As an example, consider a property with two viable alternatives: (i) an A2W system including hot water heating at a total cost of £10500, and (ii) an A2A system again including hot water heating at a total cost of £6500. In a free market (no subsidies) option (ii) would be the most economic choice. However, with the current subsidies, the household assuming that they are indifferent to the technology choice would choose option (i) as the cost to them is £3000, rather than £4000 for option (ii). In this case, the difference in subsidies creates a distortion that wastes £5000 of public money to make the householder £1000 better off, with no benefit with respect to the outcome. The solution to this issue is to provide the same incentive independent of the technology used and hence achieve the desired outcome, the adoption of low carbon heating, at the lowest overall cost. The subsidy provided should aim to only create a market distortion with respect to gas heating, and not one between different heat-pump based systems. Air-to-water, air-to-air, air-source or ground source does not matter; they are all heat pumps capable of providing low carbon heating. If they can meet a sufficiently high SCOP, currently just 2.8, then the subsidy should be the same. This would ensure that the most cost-effective technology is deployed and that taxpayers get the best overall value for money and hence the total funds for the BUS grant go further, achieving larger reductions in CO2 emissions. A variable grant rather than a fixed one The BUS grant currently provides a fixed subsidy of £7500 or £2500 depending on the technology used to replace a gas boiler. The grant is the same irrespective of the size of the property, the size of the system that is replaced, and the efficiency of the technology used. This leads to the situation where the BUS grant is both over-generous and under-generous at the same time. For a small property, replacement of a gas boiler with an A2W system might cost £8000 of which the BUS grant pays £7500 and the householder just £500. However, the householder may well have gone ahead anyway even if the cost to them was £2500, less than installation of a new gas boiler at around £3000. As a consequence, £2000 of public money has been wasted on something that would still have happened if the grant were £5500. For a larger property, replacement of a gas boiler with an A2W system might cost £14000 of which the BUS grant pays £7500 and the householder £5500. In this case the house holder may have been willing to pay £4000 but decides that paying nearly twice the cost of a replacement gas boiler simply isn’t worth it and therefore does not go ahead. An opportunity to install low carbon heating is missed. An additional problem caused by the price distortion is the effect on the amount of due diligence that some householders apply and the choices that they make. Three quotes of £8000, £9000, and £10000 where all the money comes from household funds needs serious consideration in terms of quality, checking installer reputation, equipment used etc. However, after the BUS grant, the costs to the householder are £500, £1500, and £2500, which may well create a race to the bottom. It would be easy to fall into the trap that the lowest price quote at 1/3rd the cost of the middle one and 1/5th the cost of the most expensive is the one to go for. By not caring because it is so cheap, £500 and a huge £7500 in grant, the householder sets themselves up to be exploited by cowboys out to make a fast buck. The result is a poor quality system that does not meet the householders needs, something they may come to regret in future. The solution here is to make the grant a perce...

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Temperature_Gradient

(@temperature_gradient)

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15/10/2026 8:21 pm

Posted by: @etchedpixels

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I would agree though the magic we need is something like the Midea Portasplit but with a detatchable elephant trunk that can be run through a wall and has idiot proof connectors. Even if the connector added 200 quid to the unit cost it would be cheaper than the time and hassle of a qualifed installer. That or we need to offer grants for sash windows instead where it's a trivial to do a portasplit.

A unit which uses water to transfer the heat/chill from the outdoor unit to indoor unit would be ideal - fit and insulate the water pipework (pick your preferred pipework type) fill it up with water-anti-freeze mix at the highest point and away you go. It also makes it repairable if it develops a pipework leak, needs moving and it reduces risk of refrigerant leaks inside the building.

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