Heat pump grants for landlords: the Boiler Upgrade Scheme and ECO4

In England, landlords looking at heat-pump funding mainly meet the Boiler Upgrade Scheme for England and Wales, and ECO4 across Great Britain. Scotland and Northern Ireland have different arrangements, so a landlord should not assume a heat pump grant advertised online applies UK-wide.

What is the Boiler Upgrade Scheme, and who runs it?

The Boiler Upgrade Scheme is an England-and-Wales grant scheme for heat pumps and limited biomass boilers, delivered by Ofgem for DESNZ, not by MCS. The Regulations establish “a scheme to be known as the Boiler Upgrade Scheme” to encourage heat pumps and biomass boilers for space and water heating, and they state: “These Regulations extend to England and Wales only.” Ofgem is the administrator because the government’s accounting-officer assessment says: “The scheme is delivered by Ofgem on behalf of the Department of Energy Security and Net Zero (DESNZ).” MCS matters because installations must use certified products and installers, so MCS Boiler Upgrade Scheme searches are usually about installer eligibility rather than who runs the scheme. The Ofgem Boiler Upgrade Scheme guidance also records that, from 28 April 2026, “the scheme has been extended to 2030,” superseding older pages that still say March 2028.

Which properties are eligible for the Boiler Upgrade Scheme?

A Boiler Upgrade Scheme property must be in England or Wales, must not be social housing, and must meet the plant and installation rules; from 28 April 2026 it no longer needs a valid EPC just to be an eligible property. Ofgem’s installer guidance puts the location rule bluntly: “Only properties located in England and Wales are eligible for BUS funding.” The Regulations also require that the property “is not social housing,” and Ofgem says properties classified as social housing under the Housing and Regeneration Act 2008 are not eligible for BUS funding. The heat pump itself is capped by the plant rules; for a single heat pump the eligible capacity is “no more than 45 kilowatt thermal.” Scotland has no BUS equivalent for landlords, and Northern Ireland’s old Boiler Replacement Scheme has closed.

Can a landlord claim the Boiler Upgrade Scheme grant?

A private landlord can use the Boiler Upgrade Scheme for an eligible rental property in England or Wales, but the installer applies and receives the grant, not the landlord. GOV.UK includes property “you rent out to tenants” within ownership eligibility, but the Regulations make the application installer-led: “An installer may make an application to the Authority for a boiler upgrade grant.” Ofgem’s owner guidance is clearer than the common shorthand that landlords claim a heat pump grant directly: “You do not receive the grant directly – it is paid to your installer and reflected in your quote and invoice.” Where the owner does not occupy the property, the statutory landlord-facing condition is that the owner “has informed the tenant (if any) of the impact of the installation of the eligible plant.” There is no BUS income test for the landlord in the Regulations cited here.

Can you claim the grant on every rental property you own?

You can claim one Boiler Upgrade Scheme grant for each legally separate eligible rental property in England or Wales, because the cap is per property rather than per landlord. Ofgem says: “Owners of multiple properties may apply for a BUS voucher for each legally separate property,” and GOV.UK summarises the same rule as: “You can get one grant per property.” That means a landlord asking whether the £7,500 Boiler Upgrade Scheme grant is capped per landlord should start from the property-by-property rule, not a portfolio-wide cap. Not every rental property qualifies: social housing is excluded, and a previous public grant for a heat pump or biomass boiler at the same address can block another BUS grant for that property. Scotland instead offers private landlords a repayable loan, with different limits.

Does an air-to-air heat pump qualify?

An air-to-air heat pump qualifies for the Boiler Upgrade Scheme from 28 April 2026 for residential properties, but no BUS claim can be made until there is an MCS-certified air-to-air installer. The 2026 amendment states the exclusion negatively: “An air-to-air heat pump is not an eligible plant in relation to a non-residential building,” which means residential air-to-air systems are within the scheme if the other rules are met. GOV.UK lists “£2,500 towards an air-to-air heat pump.” The practical block is certification: MCS’s consumer page says, “At the moment, no installers are yet certified to install air-to-air heat pumps.” So Boiler Upgrade Scheme air-to-air eligibility exists in law, but the grant is not practically claimable until MCS certification catches up. Scotland’s Home Energy Scotland material says air-to-air heat pumps are not funded through that scheme.

What EPC rating do you need for a heat pump grant?

No EPC rating band is required for a Boiler Upgrade Scheme heat pump grant in England or Wales, and since 28 April 2026 a valid EPC is not required at all. The sharp point is that BUS never had a minimum A-to-G band threshold: claims that C-rated properties were excluded are false. Before April 2026, the old rule was about having a valid EPC with no outstanding loft or cavity-wall-insulation recommendations, not being below a particular band. The current law is simpler: the 2026 amendment says, “Regulation 5 is amended to remove the requirement for a property to have a valid energy performance certificate to be considered an ‘eligible property’ under the 2022 Regulations.” Abodient can hold the EPC certificate against a rental property and record its expiry, which matters because the EPC may still affect MEES and letting compliance even though it is no longer a BUS eligibility threshold.

Do you have to pay a heat pump grant back?

A landlord does not normally have to pay a Boiler Upgrade Scheme grant back to Ofgem, because the statutory repayment power is against the installer, not the property owner. The Regulations allow the Authority to “require the installer to repay an amount” in relation to grant payments. Ofgem’s owner guidance gives the real risk instead: “If an application is rejected or a voucher is revoked, whether your installer can seek payment of the deducted amount will depend on the contractual terms you have agreed with your installer.” In other words, a revoked voucher may become a contract dispute over the deducted amount, not a statutory clawback from the landlord. For tax, a public grant is not simply added to your CGT base cost; TCGA 1992 excludes expenditure met by government or public authority funding. Scotland’s landlord product is different: it is a repayable loan.

What does a heat pump cost after the grant?

A typical air-source heat pump after the £7,500 Boiler Upgrade Scheme grant has recently landed roughly between about £2,500 and £5,500, but the exact price is whatever the installer quotes after deducting the voucher. The legal rule is the deduction, not a fixed final price: the installer must have “deducted the value of the boiler upgrade voucher” from the total quoted to the owner. Ofgem’s 2024/25 annual report says air-source heat-pump quotes were most commonly “in the £10,001 to £12,500 range,” which implies about £2,501 to £5,000 after a £7,500 grant. Nesta’s later BUS data gives a median air-source installation cost of £13,041, implying about £5,541 after the grant. Survey fees are not fixed by BUS legislation; some installers absorb them, while others charge before a quote is finalised.

Is the Boiler Upgrade Scheme worth it for a landlord?

The Boiler Upgrade Scheme is worth considering for a landlord when the property already suits a heat pump, but it is not a legal substitute for doing the cheapest EPC-compliance works first. Private landlords can use BUS because GOV.UK includes a property “you rent out to tenants,” but current private-rented MEES law still focuses on EPC E: landlords cannot let covered properties below E unless an exemption applies. Future higher MEES standards remain subject to Parliament; the government response says: “The legislative changes set out in this document will be subject to Parliamentary approval.” The strongest financial case is where the £7,500 grant narrows an unavoidable heating-replacement bill. DESNZ puts the pre-grant capital gap starkly: “It is, on average, £9,000 more expensive to install a heat pump than to replace an existing fossil fuel heating system without the support of a BUS grant.”

Can a heat pump make your EPC rating worse?

A heat pump can make an EPC rating worse because the headline EPC energy-efficiency rating is cost-based, so switching from gas to electricity can lower the score even while reducing carbon. The EPC must show the building’s asset rating calculated using the approved methodology, and SAP explains the metric: “The SAP rating is based on the energy costs associated with space heating, water heating, ventilation and lighting, less cost savings from on-site energy generation technologies.” The Scottish Government states the consequence directly: “As a result, installing a zero emissions system could lead to a worsening of the rating.” MHCLG has recognised the same problem for England and Wales, noting that an energy-cost metric “can penalise electric heating systems relative to fossil fuel heating on basis of cost.” That is how a supposedly green upgrade can drop a rental from C to D.

Can a landlord get an ECO4 grant?

A landlord is not the ECO4 applicant or payee in the same way as a normal grant claimant; ECO4 is a Great Britain supplier-obligation scheme where eligible private-rented homes usually need SAP band E, F or G, not D. The ECO4 Order extends to “England and Wales and Scotland,” so it does not cover Northern Ireland. The legal duty is on energy suppliers: “A participant must achieve its total home-heating cost reduction obligation by promoting qualifying actions.” For private rented premises, the core ECO4 rule is that “the pre-project SAP band is band E, F or G.” GOV.UK confirms: “If you rent from a private landlord, the house must have an energy efficiency rating of E, F or G to be eligible.” Band D belongs to the separate Great British Insulation Scheme route in England and Wales, not ordinary ECO4 PRS eligibility.

How do you apply for an ECO4 grant?

You apply for ECO4 by going through a participating council, an obligated energy supplier, or an installer route, not by submitting a single landlord ECO4 grant form on GOV.UK. GOV.UK says: “Contact your local council to find out if they’re taking part in the Energy Company Obligation scheme, or contact an energy supplier directly.” Ofgem adds that you can approach any obligated supplier, “even if they are not your energy provider.” For ECO4 Flex, the council or devolved administration referral matters because Ofgem says: “If your LA or DA is participating in the scheme, they can make a referral for ECO4.” Passing the eligibility rules is not a guarantee of funded works: Ofgem warns that eligibility “doesn’t necessarily mean that an energy supplier or installer will decide to install energy efficiency measures in your home.” In Northern Ireland, ECO4 does not apply; Affordable Warmth is separate.

When does ECO4 end?

ECO4 now ends on 31 December 2026 in England, Wales and Scotland, after being extended from the original 31 March 2026 date. The amending Order changed article 10 by substituting “31st December 2026” for “31st March 2026,” and its explanatory text says: “The overall home-heating cost reduction target will end on 31st December 2026 instead of the date originally specified.” DESNZ states the same result: “We will extend the end date of ECO4 by 9 months, meaning ECO4 will end on 31 December 2026.” That is a supplier-obligation end date, not a guaranteed household application deadline, and the extension did not create a larger funding pot. DESNZ says the extension is for suppliers to complete existing obligations, “not to expand the scope or scale of the scheme.” ECO4 does not run in Northern Ireland.

Last reviewed September 2026.

Sources

• Boiler Upgrade Scheme Regulations 2022, regulation 3 — “A scheme to be known as the Boiler Upgrade Scheme, which is a scheme to facilitate and encourage the use of heat pumps and biomass boilers in the space and water heating of certain properties (“the Scheme”), is established by these Regulations.” Source
• Boiler Upgrade Scheme Regulations 2022, regulation 1 — “These Regulations extend to England and Wales only.” Source
• DESNZ Boiler Upgrade Scheme accounting officer assessment — “The scheme is delivered by Ofgem on behalf of the Department of Energy Security and Net Zero (DESNZ).” Source
• Ofgem Boiler Upgrade Scheme installer guidance v5.1 — “As of 28 April 2026, the scheme has been extended to 2030.” Source
• Ofgem Boiler Upgrade Scheme installer guidance v5.1 — “Only properties located in England and Wales are eligible for BUS funding.” Source
• Boiler Upgrade Scheme Regulations 2022, regulation 5 — “it is not social housing,” Source
• Ofgem Boiler Upgrade Scheme installer guidance v5.1 — “Properties classified as social housing under section 68 of the Housing and Regeneration Act 2008, are not eligible for BUS funding.” Source
• Boiler Upgrade Scheme Regulations 2022, regulation 9 — “no more than 45 kilowatt thermal” Source
• Boiler Upgrade Scheme Regulations 2026 — “Regulation 5 is amended to remove the requirement for a property to have a valid energy performance certificate to be considered an “eligible property” under the 2022 Regulations.” Source
• Home Energy Scotland Grant and Loan — “You can currently apply for the Home Energy Scotland Grant and Loan if the property is an existing property located in Scotland and you are the homeowner – you own the home you live in and it is your only or primary private residence.” Source
• Northern Ireland Department for Communities, closure of Boiler Replacement Scheme — “The Scheme, which offered a grant of up to £1,000 for homeowners to replace boilers that are over 15 years old, has ended due to budgetary constraints, and applications will no longer be accepted.” Source
• GOV.UK Boiler Upgrade Scheme eligibility — “own the property you’re applying for (including if it’s a business, a second home, or a property you rent out to tenants)” Source
• Boiler Upgrade Scheme Regulations 2022, regulation 14 — “An installer may make an application to the Authority for a boiler upgrade grant (a “grant application”) in relation to the installation of an eligible plant—” Source
• Ofgem Boiler Upgrade Scheme property owner guidance v5 — “You do not receive the grant directly – it is paid to your installer and reflected in your quote and invoice.” Source
• Boiler Upgrade Scheme Regulations 2022, regulation 14 — “if the property owner does not occupy the property, has informed the tenant (if any) of the impact of the installation of the eligible plant,” Source
• Ofgem Boiler Upgrade Scheme installer guidance v5.1 — “Owners of multiple properties may apply for a BUS voucher for each legally separate property.” Source
• GOV.UK Boiler Upgrade Scheme, what you can get — “You can get one grant per property.” Source
• Boiler Upgrade Scheme Regulations 2022 — “there has not been a previous grant from public funds for a heat pump or biomass boiler at the same address” Source
• Boiler Upgrade Scheme Regulations 2026 — “An air-to-air heat pump is not an eligible plant in relation to a non-residential building.” Source
• GOV.UK Boiler Upgrade Scheme, what you can get — “£2,500 towards an air-to-air heat pump” Source
• MCS air-to-air heat pumps — “At the moment, no installers are yet certified to install air-to-air heat pumps.” Source
• Scottish Government FOI response on Home Energy Scotland — “I would highlight, in particular, the section titled ‘Air to water, ground to water and water to water heat pumps’ which states that air to air heat pumps are not funded through the scheme.” Source
• Ofgem Boiler Upgrade Scheme property owner guidance v5 — “If an application is rejected or a voucher is revoked, whether your installer can seek payment of the deducted amount will depend on the contractual terms you have agreed with your installer.” Source
• Boiler Upgrade Scheme Regulations 2022, regulation 22 — “require the installer to repay an amount” Source
• Taxation of Chargeable Gains Act 1992, section 50 — “There shall be excluded from the computation of a gain any expenditure which has been or is to be met directly or indirectly by the Crown or by any Government, public or local authority whether in the United Kingdom or elsewhere.” Source
• Home Energy Scotland landlord loan — “You can choose how long to repay the loan, up to a maximum of eight years.” Source
• Boiler Upgrade Scheme summary business case — “The BUS will continue to provide grant support of £7,500 towards the upfront cost of installing air-to-water heat pumps (AWHP) (previously known as air source heat pumps (ASHP)) and ground source heat pumps (GSHP) to eligible applicants in England and Wales, including £5,000 for biomass boilers in limited circumstances.” Source
• Boiler Upgrade Scheme Regulations 2022, regulation 14 — “the installer has deducted the value of the boiler upgrade voucher for which the application is being made from the total amount quoted to the property owner in relation to the installation of the eligible plant” Source
• Ofgem BUS Annual Report 2024 to 2025 — “ASHP quotes were most commonly in the £10,001 to £12,500 range.” Source
• Nesta, Four years of the Boiler Upgrade Scheme in four charts — “The median cost of an air source heat pump installation (in real terms) – including the unit cost, installer fees and associated home upgrade costs – rose slightly this year, from £12,973 to £13,041 (an increase of 0.4%).” Source
• GOV.UK domestic private rented property MEES guidance — “Since 1 April 2020, landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place.” Source
• GOV.UK PRS energy performance government response — “The legislative changes set out in this document will be subject to Parliamentary approval.” Source
• Boiler Upgrade Scheme summary business case — “It is, on average, £9,000 more expensive to install a heat pump than to replace an existing fossil fuel heating system without the support of a BUS grant.” Source
• Energy Performance of Buildings (England and Wales) Regulations 2012, regulation 9 — “show the asset rating of the building, calculated and expressed in accordance with the methodology approved by the Secretary of State under regulation 24 of the Building Regulations 2010” Source
• SAP 10.2 — “The SAP rating is based on the energy costs associated with space heating, water heating, ventilation and lighting, less cost savings from on-site energy generation technologies.” Source
• Scottish Government domestic EPC reform consultation — “As a result, installing a zero emissions system could lead to a worsening of the rating.” Source
• GOV.UK energy performance of buildings reform response — “There was recognition that an energy cost metric is responsive to energy prices, which can change over the validity period making the information out of date, whilst it can penalise electric heating systems relative to fossil fuel heating on basis of cost.” Source
• Electricity and Gas (Energy Company Obligation) Order 2022, article 1 — “This Order extends to England and Wales and Scotland.” Source
• Electricity and Gas (Energy Company Obligation) Order 2022, article 10 — “A participant must achieve its total home-heating cost reduction obligation by promoting qualifying actions.” Source
• Electricity and Gas (Energy Company Obligation) Order 2022, article 14 — “the measure is installed as part of an ECO4 project at private rented premises for which the pre-project SAP band is band E, F or G” Source
• GOV.UK Energy Company Obligation — “If you rent from a private landlord, the house must have an energy efficiency rating of E, F or G to be eligible.” Source
• Electricity and Gas (Energy Company Obligation) Order 2023, article 12 — “where the premises are private rented premises in England or Wales, band D, E, F or G” Source
• GOV.UK Energy Company Obligation — “Contact your local council to find out if they’re taking part in the Energy Company Obligation scheme, or contact an energy supplier directly.” Source
• Ofgem ECO homeowners and tenants guidance — “You can contact any of the obligated energy suppliers to find out how they may be able to help you benefit from the ECO scheme, even if they are not your energy provider.” Source
• Ofgem ECO homeowners and tenants guidance — “If your LA or DA is participating in the scheme, they can make a referral for ECO4.” Source
• Ofgem ECO homeowners and tenants guidance — “It is important to note that eligibility for ECO doesn’t necessarily mean that an energy supplier or installer will decide to install energy efficiency measures in your home.” Source
• nidirect Affordable Warmth Scheme — “The Affordable Warmth Scheme (AWS) is an applications-based process delivered by the Northern Ireland Housing Executive (NIHE).” Source
• Electricity and Gas (Energy Company Obligation) Order 2026 — “In article 10(1), for “31st March 2026” substitute “31st December 2026”.” Source
• Electricity and Gas (Energy Company Obligation) Order 2026 — “The overall home-heating cost reduction target will end on 31st December 2026 instead of the date originally specified in Electricity and Gas (Energy Company Obligation) Order 2022 (S.I. 2022/875) (“the 2022 Order”).” Source
• DESNZ ECO4 end-date response — “We will extend the end date of ECO4 by 9 months, meaning ECO4 will end on 31 December 2026.” Source
• DESNZ ECO4 end-date response — “We will not do so, because the extension is intended solely to allow suppliers extra time to complete existing obligations and for installers to remediate not to expand the scope or scale of the scheme.” Source