What you need to know about the Boiler Upgrade Scheme

What you need to know about the Boiler Upgrade Scheme

Iain Bevan, Commercial Manager – Heating & Renewables, at Daikin outlines what installers need to know about the Boiler Upgrade Scheme.  

With the Domestic Renewable Heat Incentive (RHI) scheme coming to an end in March, the Boiler Upgrade Scheme (BUS) was introduced in England and Wales from April 2022.

Both schemes incentivise homeowners to consider more sustainable ways of heating their homes by providing grant payments for eligible installations. But the way they work is very different.

It’s vital that installers have a good understanding of the incoming BUS, so they can continue to play their part in securing funding for new heat pump customers when the two incentives switch over.

While the heat pump market has enjoyed steady growth, industry estimates from November 2020 predict that 17,000 new heat pump installers will be required in the next decade to deliver on the government’s ambitious target of 600,000 heat pump installations per year by 2028.

Early adopters need support and encouragement over and above the financial incentives on offer, to help enter the world of renewable home heating with confidence.

And that comes down to having a highly-trained, manufacturer-endorsed installer with a proven track record, who can walk them through the entire process – including funding – and who will get the install and the associated paperwork right first time. This includes clearly explaining the energy efficiency and cost saving benefits homeowners will enjoy throughout their new system’s lifetime.

To help installers understand how to use the BUS, Daikin recently hosted an installer webinar outlining all the details – and will continue to support installers with training and membership of the Sustainable Home Network.

What is the Boiler Upgrade Scheme (BUS)?
The BUS is a UK government initiative to aid the decarbonisation of buildings. It will provide upfront capital grants of £5,000 to support the installation of air source heat pumps, and £6,000 for ground source heat pumps, in homes and some non-domestic buildings across England and Wales. Biomass boilers are also eligible for £5,000 grants in some circumstances.

The scheme will facilitate the installation of 90,000 heat pumps, and applications will be open from Spring for three years. Hybrid systems are not eligible.

And while the BUS will not be open to those in Scotland, homeowners will instead be able to apply for a Home Energy Scotland Cashback & Loan Scheme.

Who is responsible for administering the payments?
In October 2021, the Department for Business, Energy & Industrial Strategy (BEIS) named Ofgem as the intended administrator for the BUS scheme. As part of the process, Ofgem is responsible for assessing applications, fulfilling grant payments and carrying out audits and compliance public reporting.

What are my obligations?
The BUS is an installer-led process, meaning the installer will apply to Ofgem for the grant after receiving instruction from a property owner to carry out the installation, and provide all the necessary information.

Once Ofgem has completed the assessment, confirmed homeowner consent and is satisfied with the application, a voucher will be issued to the installer. Once installation is complete, the installer then applies to redeem the voucher and Ofgem assesses the redemption application before paying the grant to the installer.

The £5,000 is then taken off the invoice sent to the homeowner.

What are the eligibility criteria?
In order to be eligible for the BUS, installers must be MCS-certified, and the commissioning date of the installation must be after 1st April 2022. Both domestic and non-domestic buildings are eligible, including custom builds, as long as the plant is new at the time of installation.

The heat source replacing a fossil-fuelled system must be either an air or ground source heat pump with a minimum seasonal coefficient performance of 2.8. It must meet full space heating and hot water requirements and operate a 45kWh total capacity limit, including for shared ground loop systems.

Biomass boilers are eligible only in rural areas, and in properties not fuelled by mains call.

When will I receive payment?
Installers will be required to create a BUS account before applying for their first voucher.

Once a voucher has been issued, the installer must submit a redemption application within the voucher validity period, in order to receive the grant amount.

Ofgem intends to make payment to the installer within a week of receiving the successful application, and installer payment cycles will run on a weekly basis.

What other incentives are available to homeowners?
In addition to the BUS, Daikin UK is offering homeowners £500 boiler scrappage cashback when switching old oil, LPG or solid fuel boilers for a Daikin heat pump. That’s effectively another 10% on top of the BUS grant – something we are promoting to homeowners to encourage them to work with a Daikin-accredited installer.

Related posts