Boiler Upgrade Scheme guidance
6 May 2022
The Department for Business, Energy and Industrial Strategy (BEIS) and Ofgem have published additional guidance for contractors on the Boiler Upgrade Scheme (BUS).
The BUS is available for installations commissioned from 1 April 2022 and is now open for voucher applications.
To be able to submit voucher applications, we’d like to remind you that contractors need to register for a BUS installer account. Information on how to register for a BUS installer account can be found via Ofgem, the administrator of the scheme.
Ofgem’s online application portal launch has been delayed until the end of July, but applications can still be made. You can find the voucher application form and redemption application form on Ofgem’s website.
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 that commissioned installations 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 announced a process 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 are 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 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 this to happen and there is enough budget to meet the volume of vouchers anticipated. Ofgem will publish monthly reports detailing how many vouchers have been issued and redeemed and the remaining budget.
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:
- The Ofgem consultation on their administration of the BUS lists the eligibility criteria on pages 14 and 15. The consultation response can be found here.
- Further detail about these requirements and the rationale is set out in the BEIS government response and the requirements are also set out in the draft BUS regulations.
Need more help?
Ofgem has also updated its email address to boilerupgradescheme@beis.gov.uk. Send all future enquiries directly to this address.
If you need more help from MCS, you can contact our helpdesk. We will also share more official guidance from BEIS and Ofgem as and when we receive it.