BUS Grant Update: Good News for Heat Pump Installers and Homeowners
If you've been wondering whether the Boiler Upgrade Scheme (BUS) is going to be cut, we've got some good news.
There's been plenty of speculation recently about government funding for heat pumps, and understandably, it's left some homeowners and installers wondering what happens next. When people are unsure whether financial support will still be there, it can make them think twice about going ahead with a heat pump installation.
But the latest Budget has brought some welcome reassurance. The Boiler Upgrade Scheme has been protected, with £400 million in funding confirmed for 2027–28. No reduction to the individual heat pump grant has been announced.
So, what's actually changing?
The main thing to know is that the government is keeping the Boiler Upgrade Scheme going, with no changes announced to the grant amounts or eligibility.
Although current BUS funding isn't being cut, the overall budget won't increase year on year by as much as previously planned. Annual funding is fixed at £400 million, increasing in line with inflation, rather than following the higher funding trajectory originally outlined in the Warm Homes Plan.
Despite this, it’s welcome news for installers who rely on the grant to help customers make the move to heat pumps. It also gives homeowners more confidence that support is still available when they're weighing up their options.
There has been a £1 billion reduction in funding for the wider Warm Homes Plan, but that's separate from the BUS grant. The majority of funding for low-income households and social housing, delivered through councils and mayors, is also being protected.
It's an important distinction. The wider programme has seen a funding cut, but that doesn't mean the Boiler Upgrade Scheme has been cut too.
The government is still backing heat pumps
The Budget is a reassuring sign that heat pumps remain part of the government's long-term plans.
Moving towards cleaner heating is an important part of reducing the UK's reliance on fossil fuels, and heat pumps have a big role to play in that. Continued support through the BUS grant helps make installations more affordable and encourages more homeowners to consider making the switch.
For installers, that matters. Customers need confidence before committing to a new heating system, and uncertainty around grants can make those conversations more difficult.
Keeping the grant in place gives you something positive to talk about with customers who may have been holding off while waiting for the Budget announcement.
There's also a new loan scheme
The government has also introduced the Warm Homes Loan Scheme to help households pay for energy improvements, including heat pumps and battery storage.
The idea is to give homeowners another way to manage the upfront cost of making improvements to their homes. It's separate from the Boiler Upgrade Scheme, so it provides another route to funding rather than replacing the existing scheme.
Importantly, these loans will be available alongside the BUS grant, potentially giving homeowners access to even more financial support when upgrading their heating systems.
There are still details to get to grips with around how the loans will work in practice. We'll keep an eye on further announcements as more information becomes available.
What does this mean for you as an installer?
There's plenty of reason to be optimistic about the future of heat pumps. With the BUS grant staying in place, continued government funding and the introduction of the Warm Homes Loan Scheme, there are lots of good opportunities to help more homeowners make the switch.
At Alto Energy, we're continuing to support installers through our MCS Umbrella Scheme, taking care of the design, equipment supply, MCS certification and commissioning, so you can focus on the installation itself.
We also deduct the BUS grant from the cost upfront and cash flow it ourselves, so you don't have to. This means you don't need to wait for the grant to come through to get your money back, helping to protect your cash flow and take the financial pressure off your business.
If you're looking to get into heat pumps or grow your existing business, find out more about our MCS Umbrella Scheme and how we can support you.
