Heat pumps remain the UK government's preferred low-carbon heating technology, and the Boiler Upgrade Scheme has been extended and expanded into 2026. But headlines about £7,500 grants and tiny running costs hide a more nuanced picture. This guide explains exactly how the BUS works in 2026, what installation actually costs, what running a heat pump costs compared with gas, and which homes are genuinely good candidates today.
The Boiler Upgrade Scheme provides a one-off grant of £7,500 towards an air source or ground source heat pump in England and Wales. The grant is paid to your installer, who deducts it from your bill. You do not need to claim anything yourself once you have signed a contract with an MCS-certified installer.
To qualify your property must have a valid Energy Performance Certificate with no outstanding recommendations for loft or cavity wall insulation. The system replaced must be a fossil fuel boiler — typically gas, oil or LPG. New-builds and homes already heated electrically are not eligible. Scotland runs the separate Home Energy Scotland Grant and Loan, which can total up to £15,000 combined.
A typical air source heat pump installation in a 3-bed semi runs £11,000 to £16,000 before grant. Larger or poorly-insulated homes can reach £18,000 to £22,000. Ground source systems start around £25,000 because of the borehole or trench works. After the £7,500 BUS grant, most households pay £4,000 to £10,000 net.
The big variable is your existing radiators. Heat pumps work at lower flow temperatures (typically 45 to 50°C) than gas boilers, so radiators may need upsizing. A good installer surveys this properly; a poor installer leaves you with cold rooms and high bills. Insist on a room-by-room heat loss calculation as part of the quote.
A well-installed heat pump has a Coefficient of Performance (COP) of around 3.0 to 3.5, meaning it produces 3 to 3.5 kWh of heat per kWh of electricity. With electricity at roughly 27p/kWh and gas at 7p/kWh in 2026, the maths is closer than the marketing suggests. A heat pump at COP 3.2 effectively costs about 8.4p per kWh of heat, versus 7.8p for a 90 percent efficient gas boiler.
The savings come from heat pump-specific tariffs (Octopus Cosy and similar) that drop electricity to around 13p/kWh during off-peak hours when the heat pump runs hardest. Combined with thermostat scheduling and a hot water cylinder, well-set-up households typically pay £150 to £400 less per year than they did on gas.
The best candidates have decent loft and cavity wall insulation, double glazing, and either large existing radiators or underfloor heating. Mid-century semis and post-1990 detached houses are usually straightforward. Solid-wall Victorian terraces, listed buildings and very large or rambling properties often need extra fabric upgrades first.
If your home lacks insulation, consider sequencing — insulate first (often grant-funded under ECO4 or GBIS), then install the heat pump 12 months later when your heat demand has dropped. A smaller, cheaper unit will do the job and run more efficiently.
Use only MCS-certified installers — it is a BUS requirement and your route to redress if things go wrong. Get three quotes, all based on a proper heat loss survey rather than a rough guess from boiler size. Ask for the installer's average COP across past installs and references from similar homes.
Avoid installers who can quote without visiting, who recommend the same model regardless of property, or who skip discussing radiator upgrades. A good installer will sometimes advise against a heat pump for your specific home — that honesty is worth more than the cheapest quote.
Yes — modern air source units operate efficiently down to -15°C. They run for longer hours at low temperatures rather than blasting heat in short bursts like a gas boiler.
Almost always, yes. Combi boiler users need to find airing cupboard space for a cylinder, typically 180 to 250 litres.
Hybrid systems are allowed but receive a smaller grant and rarely make financial sense. Most installers recommend full replacement.
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