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Complete Guide of Replacing UK Boiler Grants

The government’s ECO (Energy Company Obligation) scheme now provides financial subsidies for the replacement of liquefied petroleum gas and fuel boilers in England, Wales, and Scotland.


As part of the government’s Energy Company Obligation (ECO) scheme, many homeowners and tenants across the UK can receive boiler grants. Additionally, eligible households can receive a free, energy-efficient boiler.


Eligible households can have their outdated and inefficient boilers (over 8 years old) replaced with a new A-rated condensing boiler for free (subject to a free survey and meeting eligibility criteria). According to the Energy Saving Trust, a new A-rated boiler can save up to 25% on annual fuel costs.


What is the Boiler Upgrade Scheme?

The UK government’s Boiler Upgrade Scheme encourages people in England and Wales to install low-carbon heating systems, including heat pumps and biomass boilers.


This new Boiler Upgrade Scheme is part of the “Heat and Buildings Strategy” launched by the government in October 2021, allowing homeowners to earn up to £5,000 towards replacing their existing oil or gas boilers with low-carbon heating systems, such as heat pumps.


This £450 million initiative will help install nearly 100,000 heat pumps over the next three years.


If you want to be an early adopter of low-carbon heating, this grant can significantly reduce the installation cost compared to a gas boiler. On the other hand, heat pumps are more suitable for energy-efficient homes with proper insulation.


This effort is part of the government’s “Affordable Warmth” program aimed at helping low-income families reduce heating costs, improve energy efficiency, and reduce the nation’s carbon footprint. Even if you are not eligible for the full grant, partial funding may still be available to greatly reduce the overall cost of the proposed new boiler.


The scheme is available to homeowners and private tenants, so if you think you can benefit from it, apply as soon as possible.


There are various government aids, incentives, and programs to help you purchase a new boiler. Even if you are not eligible for government assistance, alternative schemes and financing options can still support you in finding a warmer home.


According to the Energy Saving Trust, the average cost of purchasing and installing a new boiler with thermostatic valves is around £2,300. Additionally, as heating accounts for about 55% of the average household’s energy consumption, a new, more energy-efficient boiler can lead to energy savings of over £100 per year.


Through the Boiler Upgrade Scheme, the government encourages homeowners to adopt low-carbon heating technologies such as heat pumps (BUS). These incentives can help homeowners cover the initial costs of low-carbon heating systems.


The scheme is open to residential and small non-residential properties in England and Wales and will be effective from 2022 to 2025.


What can you receive?

You can receive:

  • £5,000 discount – air source heat pump and installation
  • £5,000 discount – biomass boiler and installation
  • £6,000 discount – ground source heat pump and installation


What technologies does the scheme cover and how much funding can be obtained?

The Boiler Upgrade Scheme applies to three types of low-carbon heating systems:

  • Air Source Heat Pump: £5,000 grant – price + installation.
  • Biomass Boiler: £5,000 grant – price + installation*
  • Ground Source Heat Pump: £6,000 grant + installation.


*Please note that this grant is only applicable to biomass boilers in rural areas and homes not connected to the gas grid and has an emissions certificate, proving that pollution emissions are kept at a minimum. This measure does not apply to biomass boilers installed in self-built homes.


How do I know which low-carbon heating system is suitable for my home?

Your installer can tell you whether a heat pump or biomass boiler is suitable for your home. They may recommend starting with improving your property’s energy efficiency.


Before installing a low-carbon heating system, read our loft and cavity wall insulation tips to improve your home’s energy efficiency.


Who is eligible for this scheme?

It is only applicable to households and small business owners in England and Wales.


To apply, you must:

  • Own your own property (it can be a residential or small business property).
  • Have a property with a maximum capacity of 45kWth (this covers most households).
  • You must have a valid EPC (Energy Performance Certificate). Additionally, your EPC must not have prominent recommendations regarding loft or cavity wall insulation (unless you have an insulation exemption).


heat pump installation

When does the scheme run?

The scheme will run from 2022 to 2025.


Low-carbon heating systems commissioned (installed and thoroughly tested) on or after April 1, 2022, will be eligible for funding under this scheme.


The new heating system must also meet the total space heating and hot water requirements of your property and specific technical standards, such as minimum efficiency requirements. Again, your installer can assist you with this.


How do I gain access to this scheme?

The Boiler Upgrade Scheme is operated by installers. This means that the installers will apply for funding on your behalf.


The grant amount will be deducted from the final price you pay.


How will the application process work?

You need to find an MCS-certified installer in your area who can carry out the work. The MCS quality assurance process ensures that installers are qualified, and their goods meet the required specifications.


The installer will inform you if your installation qualifies for the scheme’s incentives.


You and your installer will agree on the estimated installation, which should include the grant from the Boiler Upgrade Scheme as a discount from the total amount.


Afterward, the installer will apply for the grant.


When the installer contacts you, you must confirm that they are acting on your behalf with Ofgem.


Boiler Scrappage Scheme

The UK launched this government scheme in 2009 to encourage homeowners to switch to more energy-efficient boilers, but it has since been phased out gradually. However, some suppliers may still offer discounts for new boiler installations in exchange for scrapping old, less efficient boilers. Nevertheless, we recommend obtaining multiple quotes as these are not government schemes. This is because, in some cases, the price of a new boiler may be higher than it should be, even with the cost reduction.


Renting a Boiler or Buying on a Monthly Basis
If you are not eligible for a boiler grant or free replacement, you may consider buying on a monthly installment basis. This service is offered by several companies and is a means of spreading the cost of a new boiler installation.


No upfront payment is required. Instead, the monthly payment covers the cost of the boiler, installation, and any maintenance, servicing, and repairs during the contract period (depending on your contract). Once you complete the payments, the boiler becomes yours. Boiler leasing is a long-term commitment.


The contract period can be as long as 12 years. However, most boiler leasing companies offer various contract lengths. The shorter your contract, the higher your monthly payments will be, but you will own the boiler sooner. Most providers also allow you to make an upfront deposit, which further reduces your monthly payments. Check the details to see if your monthly payments are planned to increase each year or if they are fixed. Also, check for penalties for late payments. Penalties can also accumulate daily, so falling behind on payments can quickly become costly.


Finally, if you plan to move before the lease term ends, boiler leasing might not be the best option. When you move, you usually have to settle any remaining balance.


If you cannot afford the upfront cost of a new boiler or prefer to make a one-time payment to cover all associated costs with the boiler, then boiler leasing might be a sensible choice.


However, remember that you will be entering into a long-term contract, and in the long run, it is unlikely to save you money compared to paying for a new boiler upfront.


In conclusion, the government’s ECO and Boiler Upgrade Scheme are designed to incentivize homeowners and tenants in England, Wales, and Scotland to switch to more energy-efficient and low-carbon heating systems. By providing financial subsidies and grants, the government aims to reduce heating costs, improve energy efficiency, and decrease the country’s carbon footprint.


If you are interested in participating in these schemes, make sure to check your eligibility and apply as soon as possible. You can find certified installers who can assist you with the application process and help you determine the most suitable low-carbon heating system for your home.


Lastly, remember to explore various options and obtain multiple quotes to ensure you are getting the best deal for your new boiler installation. Whether you choose to participate in government schemes, consider financing options, or go for a boiler leasing arrangement, it is essential to weigh the long-term costs and benefits before making a decision.


Always stay informed about the latest updates and changes in government policies to take advantage of any new incentives or support programs that may become available in the future.

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