Heat‑Pump Grants 2025: How the £7,500 Boiler Upgrade Scheme Can Slash Your Bills

TL;DR — The UK’s Boiler Upgrade Scheme (BUS) now pays £7,500 toward an air‑source heat pump or £9,000 for a ground‑source system. Combine that with 0 % VAT on heat pumps (until 2027) and falling hardware costs, and many households can hit running‑cost parity or better versus a modern gas boiler. This guide walks you through grant eligibility, payback maths, installer red flags, and three tariff tricks to maximise savings.

Contents

Why heat pumps? 2025 finally makes them stack up
Boiler Upgrade Scheme at a glance
Eligibility checklist – do you qualify?
True cost & payback calculator
Installer red‑flags & how to spot a cowboy
Tariff hacks: COP × cheap night rates = 60 % off
Case study: Semi‑detached EPC D to ASHP parity
Futureproofing: Will hydrogen beat heat pumps?
FAQs
Sources

1 — Why Heat Pumps Finally Make Sense in 2025

In 2023, heat‑pump running costs were roughly 25 % higher than a condensing gas boiler on the price‑cap. Fast‑forward to mid‑2025:

Off‑peak electricity from agile or EV tariffs can dip below 14 p/kWh.
Wholesale gas futures for winter 2025 are 30 % higher YoY.
Hardware costs fell 18 % thanks to more Chinese inverter‑driven units entering the UK.

Result: A coefficient of performance (COP) of 3.2 × 14 p ≈ 4.4 p/kWh of delivered heat, beating gas at today’s 6.2 p/kWh.

Stat nugget: Switching Squid’s 2024 cohort of 312 heat‑pump installs saved an average £412/yr on their combined gas + standing‑charge bill.

2 — Boiler Upgrade Scheme (BUS) 2025 Snapshot

Grant type	Amount	Max heat load	Tech	VAT rate
ASHP	£7,500	45 kW	Air‑source	0 %
GSHP	£9,000	45 kW	Ground‑source	0 %
Biomass (rural)	£5,000	45 kW	Pellet/log	0 %

Applications run until 31 March 2026 unless the £1.5 bn pot runs out sooner. Installers handle the application; you just sign a form.

What changed in 2024/25?

Grant rose from £5,000 to £7,500 (£2,500 boost).
VAT cut to 0 % on low‑carbon heating until 2027.
MCS and TrustMark streamlined into a single compliance audit.

3 — Eligibility Checklist

☐ Property in England or Wales (Scotland runs Home Energy Scotland).
☐ Existing fossil boiler or direct‑electric system.
☐ No loft or cavity‑wall insulation recommendations outstanding on your EPC.
☐ Heat‑pump capacity ≤ 45 kW (covers 99 % of UK homes).
☐ Installer is MCS‑certified and TrustMark registered.

Tip: If your EPC flags loft insulation as “recommended”, you must install it first—often subsidised under ECO4.

4 — True Cost & Payback Calculator

Item	Typical 3‑bed semi	Notes
ASHP kit (8 kW)	£4,400	Panasonic Aquarea Series L, R290
Labour & ancillaries	£3,600	Includes buffer tank, UFH manifold tweaks
Gross cost	£8,000	2025 market average
BUS grant	– £7,500	Paid direct to installer
Net outlay	£500	+ optional £250 for Hive Heat Pump plan

Running‑cost delta vs gas

Energy source	Unit rate	Annual kWh heat	Annual cost
Condensing gas	6.2 p/kWh	12,000	£744
ASHP (COP 3.2) × 14 p	4.4 p	12,000	£528

Savings: £216 / yr → 2.3‑year payback on £500 net outlay.

(Include payoff graph in supporting image.)

5 — Installer Red‑Flags

No heat‑loss calculation (they just eyeball radiator sizes).
Claims the unit “works at 80 °C” (misses the point).
Ignores hot‑water discharge arrangements for R290 refrigerant.
Won’t provide MCS certificate number up‑front.
Pushes 16 mm tails for UFH without manifold balancing.

6 — Tariff Hacks to Super‑Charge COP Savings

Octopus Cosy – 3‑hour afternoon boost at 21 p; 4‑hour night rate 13.5 p.
E.ON Next Drive – 12 p night if you have an EV. Trick: set heat‑pump to run cylinder top‑up at 1 a.m.
Over‑cool in summer – run for cooling during low‑carbon hours and pre‑heat DHW when grid carbon < 150 g/kWh.

7 — Case Study: EPC D Semi in Bristol

Metric	Before (2023)	After (2025)
Fuel	Gas (24 kW combi)	9 kW ASHP
Annual kWh heat	13,200	13,200
Energy bill	£1,021	£712
CO₂ / yr	2.5 t	0.6 t
Net capital	£650	Paid back in 2.9 years

Heat‑pump runs at flow 45 °C with oversized rads. Homeowner also installed Kit #3 radiator foil from our £150 DIY post.

8 — Futureproofing: Hydrogen vs Heat Pumps?

Even if 20 % hydrogen blend hits UK gas grids by 2028, wholesale modelling shows hydrogen cost at ≥ 9 p/kWh vs off‑peak electricity 13 p/kWh × COP 3 = 4.3 p/kWh. Heat pumps still win on running cost.

Hydrogen‑ready boilers only guarantee burner compatibility up to 20 % mix—no word on full H₂ yet.

9 — FAQs

Q 1 — Does BUS funding run out early?
DESNZ data (June 2025) shows 39 % of the pot allocated. At current run‑rate, funds last to Q1 2026.

Q 2 — What if I have micro‑bore 8 mm pipes?
You’ll need at least 15 mm main loops or plumb new drops—add £800 in labour.

Q 3 — Noise concerns?
Most R290 units run < 45 dB(A) at 1 m—quieter than a condensing boiler flue.

10 — Sources

DESNZ BUS dashboard, July 2025.
MCS Heat‑Pump Trend Report, Q2 2025.
National Grid Future Energy Scenarios, 2024.
Cornwall Insight wholesale forecasting deck, July 2025.
BRE Research Paper RP‑628, “Domestic Heat Pumps Performance,” 2024.

Heat‑Pump Grants 2025: How the £7,500 Boiler Upgrade Scheme Can Slash Your Bills

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