Heat pump grants work, mostly. Tariffs do the rest
A government evaluation says the Boiler Upgrade Scheme led to 36,508 heat pumps that wouldn't otherwise exist. But only 42% of owners saw bills fall, and tariffs made the difference.
The government's flagship heat pump grant has been given its final report card, and on paper it passes. An evaluation published by the Department for Energy Security and Net Zero (DESNZ) on 24 September estimates that 36,508 low-carbon heating systems were installed in England and Wales between April 2022 and March 2025 that would not have happened without the Boiler Upgrade Scheme.
The BUS demonstrated good cost-effectiveness, delivering carbon abatement at a lower cost than anticipated and generating substantial net social benefits.
— Evaluation of the Boiler Upgrade Scheme, 2026 final report
What the grant actually bought
The Boiler Upgrade Scheme (BUS) gives households a grant towards a heat pump or, in some cases, a biomass boiler. The grant for air source and ground source heat pumps rose to £7,500 in October 2023. It covers England and Wales only, so Scotland and Northern Ireland aren't included.
Over its first three years the scheme paid out £328.2m and supported 49,136 installations. The evaluators estimate that 74% of those were "additional", meaning the heat pump would not otherwise have gone in. The main findings are:
- 68% of property owners said the grant prompted them to install when they did, by cutting upfront costs that had held them back
- 91% were very or fairly satisfied 9 to 21 months after installation
- 42% said their total energy bills went down, rising to 52% of those who replaced a gas boiler
- 46% had switched electricity tariff since installing, increasingly to time-of-use or dedicated heat pump tariffs
- around 1,600 installer companies were active on the scheme by March 2025, but 29% reported cash flow problems
The numbers behind the numbers
Here's Ada's take. Read the list again and it's a decent result, but not a slam dunk. A quarter of the grants went to people who would probably have bought a heat pump anyway. And while cutting bills was the most common outcome, 42% is not a majority. The rest either saw no change or paid more.
The detail on tariffs is the useful bit for anyone considering a heat pump. The report found that switching to time-of-use and heat pump tariffs was linked to a greater chance of lower bills. In other words, a heat pump on a standard tariff is only half the job. The smart meter and the tariff matter nearly as much as the kit on the wall.
The report also admits that installations came in cheaper than earlier schemes, "albeit higher than initially anticipated". And among people who didn't take part, installers say worries about running costs were a common barrier. The evaluation doesn't make those worries go away.
Why it matters this autumn
The timing is useful. Ofgem's price cap rises by 4% on 1 October, to £1,723 a year for a typical household on direct debit. Ofgem says gas bills are going up by 8% while electricity is broadly stable, helped by the removal of VAT from electricity bills. That gap is exactly what makes heat pumps cheaper to run relative to gas boilers.
Demand is already moving. The Eco Experts reported that BUS applications hit a record 8,150 in July 2026, up 81% on June, after the grant for homes heating with oil or LPG was raised to £9,000. That higher grant is available until March 2027. For anyone off the gas grid, it's now one of the more generous offers around, and it sits alongside the Warm Homes Loan scheme for those who can't cover the rest of the cost upfront.
To be fair to DESNZ
A 74% additionality rate is high for a consumer grant. Many subsidy schemes pay a large share of people to do what they'd have done anyway. Satisfaction above 90% after a full heating season is also strong for a technology that still has a reputation problem. The department published the full report, technical annex and survey data, including the figures that don't flatter it, which is more than many schemes get.
Mind the hype. The heat pump works best when the tariff does too.
Sources: GOV.UK (DESNZ), BUS evaluation final report (PDF), Heat Pump News, Ofgem, The Eco Experts, The Eco Experts (price cap)