BUS 2024 – upgrading household heating

Changing the way we heat our homes by using heating systems with lower carbon alternatives plays a role in the country reaching its net zero target.

With this in mind, the Boiler Upgrade Scheme (BUS) was designed to play a key role in this endeavour.

Launched on 23 May 2022 to support the decarbonisation of heat in buildings, the scheme provides upfront capital grants to offset the cost of installing approved heat pumps and, in limited circumstances, biomass boilers in homes and small non-domestic buildings in England and Wales.

What significant changes have been made to BUS?

Since the BUS launched several significant scheme announcements were made by the previous government:

  • March 2023, an extension to the BUS scheme by three years until 2028
  • September 2023, an increase in the value of grants for heat pumps to £7,500. This came into force on 23 October 2023
  • December 2023, a proposed £1.5 billion of additional funding from 2025 to 2028.

The previous government also consulted on several proposed scheme changes. Following the consultation launched by the Department for Energy Security & Net Zero in August 2023, they published their decision in March 2024 and with the relevant changes coming into force on 8 May 2024:

  • confirming the scheme extension to 2028
  • removal of the requirement to install loft or cavity wall insulation if recommended on the property’s EPC
  • limiting the period after commissioning in which an application to the scheme can be made to 120 days

We are yet to see if, or when the current government will make any changes or amendments to this scheme.

How do I apply for a BUS grant?

There is a two-stage process when applying for a BUS grant. The first stage entails the installer submitting an initial voucher application whereafter Ofgem checks the relevant pre-installation eligibility criteria.

At this stage, property owners need to provide their consent to the application and verify the application details submitted by their installer. If the voucher application is successful, Ofgem issues the applicant with a voucher.

The second stage entails the installer submitting a voucher redemption application following the commissioning of an installation. Once Ofgem has established that the remaining eligibility requirements have been met, the grant payment is made.

During the second year of the scheme, Ofgem received a total of 22,111 stage 1 applications. After completing eligibility checks on these and outstanding applications from Scheme Year 1, the scheme administrator issued 18,772 vouchers worth over £122 million. 1,435 applications that failed eligibility checks and were rejected while 1,549 applications were withdrawn.

Ofgem also received 13,997 stage 2 applications, and 13,904 grant payments worth over £88.8 million were made.

96.2% of grants paid since the start of the scheme were for air source heat pumps and 99.5% of installations were installed in domestic properties.

How does Ofgem monitor compliance?

Ofgem operates a robust audit programme to help ensure that applicants are following the scheme rules.

It undertakes both statistical and targeted audits. Statistical audits are randomly selected to provide a representative view of the scheme population. This provides Ofgem with a reliable measure of the level and types of non-compliance within the population and allows it to monitor whether the estimated non-compliance level remains within tolerance levels agreed with the government. Targeted audits focus on installations identified as having an increased risk of non-compliance.

The most common reasons for an installation being found non-compliant during an audit were:

  • The heating system cannot meet the full space and water heating needs of the eligible property
  • An ineligible technology has been installed
  • The person who made the customer declaration was not the owner of the property.

Digital services

A key enabler of running the BUS scheme efficiently and securely is regularly reviewing and developing its digital services. During the second year, its digital service underwent significant transformation and growth. Through a series of strategic enhancements and continuous improvements, Ofgem has significantly improved the experience for installers while optimizing internal processes. This has not only streamlined operations but has also ensured that the scheme remains compliant with legislative changes.