We’ve got good news if you’re looking to upgrade your home heating system. The government has officially expanded the Boiler Upgrade Scheme’s (BUS) eligibility criteria. The grant that previously focused on air-to-water systems now includes funding for air-to-air heat pumps and thermal batteries for hot water storage.
So, if you’re replacing an old fossil fuel heating system, you could now be eligible for support to make your home more comfy throughout the year while potentially lowering your carbon footprint. Let’s find out more about what’s new to the scheme.
What is the Boiler Upgrade Scheme and what’s changed?
The Boiler Upgrade Scheme launched in May 2022 to help homeowners replace fossil fuel heating or inefficient electric systems with more efficient tech.
It was initially set to run until March 2028, but in a recent government announcement, it's officially been extended to 2030 as part of the Warm Homes plan. The plan aims to deliver £15 billion of public investment to upgrade up to 5 million homes and ease fuel poverty. 1
So, what’s actually changed? First and foremost, additional tech has been added to the eligibility criteria:
Air-to-air heating and cooling systems (aka, ‘air conditioning units’).
Energy storage systems for hot water (aka, ‘thermal batteries’).
If you’re looking to install an air-to-air heat pump and/or a thermal battery, you could now receive a £2,500 grant if you’re eligible.
The BUS grant can be claimed once per property. So, even if an air conditioning system isn’t what you’re after, you could still receive a one-time £7,500 grant towards the installation of an air-to-water heat pump (aka, an ‘air source heat pump’) or a ground source heat pump.
The important bit! This funding is only for replacing existing fossil fuel heating systems and not for replacing low carbon heating or systems in new build properties. The lower funding amount for air-to-air systems reflects the typically lower cost of the hardware compared to a full hydronic (water-based) heat pump system.
You can claim one grant per property. However, the good news is that if you’ve already used other funding schemes for insulation, doors, or even windows, you may still be eligible for the BUS grant.
Learn more about the government’s updates to the BUS grant.
Comparing the tech: traditional boilers vs heat pumps.
Here’s a simple breakdown of how the different heating and cooling systems work and differ.
Your traditional boiler.
Traditional boilers use non-renewable energy such as gas or oil to produce a flame. Then, this flame heats a sealed water system inside the boiler, which then flows through pipework into your radiators.
Though it’s a familiar system, it relies on carbon-intensive energy sources to heat your home. It doesn’t link in to, or take advantage of, any renewable energy technology that you may have installed, such as solar panels or battery storage.
Air-to-water heat pump.
Then, there’s the popular air-to-water heat pump system, more commonly known as an air source heat pump. It works kind of like a fridge but in reverse. It uses electricity to run a compressor, extracting heat energy from the outside air (yes, even when temperatures are cold) and it transfers it into your radiator system. Learn exactly how ASHPs work in the winter.
An ASHP provides gentle heat by warming the water that circulates through your existing radiators, keeping your home at a steady, comfortable temperature. Aside from the air source heat pump that’s installed outside your home, all the radiators and internal heating mechanisms remain the same. Read more about air-to-water heat pumps.
Air-to-air heat pump.
Finally, there’s the air-to-air heat pump system, which has a process similar to a traditional air conditioning unit. It extracts heat from the outside air and blows warm, dry air through the fans in your room. This type of heat pump is better suited to smaller homes, or as an extra heating or cooling source, rather than a whole home solution.
The main way it differs from an air-to-water heat pump is that it can also cool your room. This could make it a versatile choice for keeping comfy in the summer as well as winter. However, both heating and cooling functions use electricity (not gas or non-renewable energy sources) to heat or cool your home. This lets you take advantage of solar power or battery storage, potentially helping to reduce your energy bills.
Air-to-air heat pumps are great at heating individual spaces. However, they don’t usually heat your domestic hot water, so you’ll need additional equipment, such as a thermal battery, which is also now eligible for the £2,500 BUS grant.
Please note: To be eligible for the grant, the air conditioning system must be completely replacing your old heating system and not used in addition to a heating system.
Learn more differences and benefits between heat pumps and traditional boilers.
Traditional boilers vs heat pumps: what are the cost differences?
When it comes to what each system will set you back, costs vary depending on factors like home size and current insulation. To give you an idea on the budget, check out our comparison based on a typical 4-bed detached property.
The cost of a traditional boiler.
A traditional boiler is usually the cheapest upfront option, typically costing between £2,000 and £3,000. However, this price usually covers a straight swap of the boiler unit and no upgrades to your existing heating system.
If you have cold rooms or undersized radiators, fixing those issues comes with an extra cost. Plus, a boiler is rarely bespoke to your home’s specific needs, meaning that it might not guarantee the efficiency or comfort of a designed renewable system.
Air-to-water heat pump costs.
An air-to-water heat pump is the most expensive upfront. However, this is because the process involves a full assessment of your home to ensure it’s efficient and designed to the exact needs of your property, rather than using a generic one size fit’s all approach.
For a 4-bed detached home, an ASHP usually comes in between the £6,000 and £9,000 mark – after the £7,500 BUS grant is applied.
Yes, the upfront cost is higher, but the system doesn’t run on fossil fuels. This gives you the opportunity to potentially manage your home running costs by using smart tech like solar panels, solar batteries, and time-of-use tariffs like Next Pumped.
What’s more, thanks to the comprehensive home survey and design, every room in your home will have the potential to reach the right temperature and work more efficiently.
Learn more about heat pump efficiency around the home.
Air-to-air heat pump costs.
Calculating air-to-air heat pump costs is a little trickier. As we mentioned before, these systems aren’t usually installed to heat your entire home in the UK, but are more of an accessory.
Partial retrofit.
Most people install air-to-air units in just two or three main rooms for heating and cooling, keeping a more traditional system for the rest of the house. For a system that can heat and cool up to three rooms, expect to pay between £5,000 and £6,500.
Please note: Partial systems that don’t replace your main fossil fuel heating aren’t eligible for the BUS grant.
Full replacement.
If you are looking to cover your whole home, costs will likely be higher, and you’ll need to budget for a separate hot water solution. However, like ASHPs, you can try and optimise your air-to-air heat pump running costs with additional smart tech and time-of-use tariffs.
Take a deeper dive into heat pump running costs.
What to expect from your heat pump installation.
How long will you be without heating? That’s the big question! Installation times differ depending on how complex your heating system is and the level of design work needed. However, we’ve pulled together some average timescales for each option.
Traditional boiler installation.
Provided the job isn’t too complex, a new boiler can be installed in 1–2 days. Units are often available for next day fitting.
Air-to-air heat pump installation.
A small air-to-air system installation (covering up to three rooms) could take between 1–3 days – not including old radiator and pipework removal. However, a whole home retrofit would take longer, needing a full survey and design work.
Air-to-water heat pump installation.
Including all upgrades to your heating system and radiators, an air-to-water heat pump installation could take 4-5 days once all the designs and applications have been completed.
However, system design requirements and grant applications can increase wait times to around 6 weeks, from order to installation. Plus, it’s best to get it done in warmer months before you need your heating on!
Our fabric-first approach: improving air-to-air heat pump efficiency with insulation.
Before buying any new heating system, we recommend a ‘fabric first’ approach. By this, we mean checking that your home’s already relatively energy efficient and isn’t leaking energy due to poor insulation, or draughty windows and doors.
Heating a poorly insulated home is like running the heating with the front door open. By improving your insulation first, you’ll have a better chance at locking in that heat. This could lead to installing a smaller, cheaper system and enjoying a more stable temperature. Not to mention the potential lower running costs that could come with the fabric-first improvements.
If your home loses heat, you’ll need a larger, more expensive heating system to keep you warm. Whether you choose a boiler or an air-to-air source heat pump, poor insulation could lead to:
Higher bills: You’re paying to heat the outside air.
Higher upfront costs: You’ll need bigger, more power hungry equipment to reach a comfortable temperature.
Reduced efficiency: Even the best tech struggles if the heat escapes too quickly.
Larger radiators: If rooms are losing more heat than your radiators currently provide, you may need to increase the size of your radiators.
Your next steps: getting a heat pump quote.
We’re excited to launch our brand new air conditioning journey in early 2026. If you’re unsure what you’re eligible for or what could work best, check your eligibility for funding using our handy grant finder tool.
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