The latest Boiler Upgrade Scheme guidance

The Department for Business, Energy and Industrial Strategy (BEIS) and Ofgem have published additional guidance for contractors on the Boiler Upgrade Scheme (BUS).

As you know, the BUS is available for installations commissioned from 1 April 2022 and the scheme opens for voucher applications on Monday 23 May 2022.

To be able to submit voucher applications from this date, we’d like to remind you that contractors are now able to register for a BUS installer account.

Information on how to register for a BUS installer account can be found on our dedicated BUS information hub and via Ofgem, the administrator of the scheme.

Since the launch of the BUS, we have actively relayed feedback from our installer base to BEIS and Ofgem.

Below is the additional guidance on the BUS, which should hopefully provide more clarity on the process.

 

Cashflow and grant payments

The government acknowledges the potential cashflow challenges for businesses ahead of the voucher applications opening and the concern around the time it may take for grants to be paid out.

In response to these concerns, Ofgem has been considering ways to support a more streamlined journey for any installations commissioned between 1 April and 22 May 2022.

What MCS contractors need to know

Where an installation has a commissioning date between 1 April and 22 May 2022, contractors will be able to submit both voucher and redemption applications for an installation at the same time.

This temporary approach will only apply to applications submitted between 23 May and 31 May 2022, to help alleviate any potential cashflow pressures.

Please note, Ofgem will still require property owners to confirm that they have consented to the application being made on their behalf, as per the scheme regulations.

Ofgem will also have staff ready to process these applications and is able to respond to higher volumes of applications being submitted. We have been advised that processing times are subject to the volumes and quality of applications Ofgem receives, as well as property owners confirming their consent.

Information on quotations

The BUS is an upfront grant scheme intended to reduce the capital costs of low-carbon heat installations. As such, Ofgem expects the discounted cost to be provided to the property owner at the quote stage, and on the invoice following the completion of the installation.

 

Voucher availability and budget allocation

The BUS has a committed budget of £450 million over three years, split equally into £150 million per year. The aim is for these annual budgets to support low-carbon heat technologies in up to 30,000 properties per year in England and Wales.

We acknowledge the concern from contractors that vouchers could run out at the start of the scheme. However, Ofgem advises that it does not expect vouchers to run out at the start of the scheme.

What is Ofgem doing?

The Energy Security Strategy, published on 7 April 2022, highlighted that the government wants as many people as possible who want a heat pump this year to be able to have one installed.

As a result, we have been advised that Ofgem and BEIS will continue to keep uptake of the BUS under review and address any voucher availability concerns appropriately.

Ofgem informs us that quarterly caps may also be introduced to smooth deployment across the financial year, depending on the demand.

Please note, this won’t apply to the first quarter of the scheme, as any cap must be announced and published in advance of the quarter that is applied to.

 

Eligibility criteria

Ofgem has collated several of the most common queries on eligibility for the scheme. Here’s a handy summary of the key points:

  • The BUS will not support hybrid heating systems. This extends to any combination of a boiler and electric heat pump, whether installed as a split or integrated system and whether on or off the gas grid.
  • To be eligible for the BUS, the heat pump or biomass boiler must be capable of meeting the full space heating and hot water demands of the property.
  • Homeowners, small businesses, and private landlords will be eligible to apply for the BUS.
  • If the property is not a self-build property, the heat pump or biomass boiler must replace an existing fossil fuel or electric heating system. An electric heating system provides heat generated wholly or mainly from electricity, such as resistive heating or storage heaters, but does not include a heat pump.

What eligibility guidance is available?

Ofgem has published its installer guidance to provide more detailed information on the process and eligibility.

To be eligible for the BUS, all installations must adhere to the approved standards published by BEIS here.

There are several other resources available for contractors to check whether their planned installation would meet the necessary requirements for the BUS:

 

Need more help?

Ofgem has scheduled a webinar for the BUS on 19 May 2022, 10:00 to 11:15am. This online event is open to installers and industry stakeholders and will cover:

  • Highlights of the Ofgem installer guidance
  • An overview of the voucher application and redemption process
  • Information about our audit and compliance approach
  • A Q&A session

You can register for the free online event here: https://www.eventbrite.co.uk/e/boiler-upgrade-scheme-launch-event-tickets-332639883847

Ofgem has also updated its email address to boilerupgradescheme@beis.gov.uk. Send all future enquiries directly to this address.

We will also share more official guidance from BEIS and Ofgem as and when we receive it.

 

Summary of key resources