All you need to know about the Boiler Upgrade Scheme

With energy prices rising, the war in Ukraine highlighting vulnerabilities in gas supply, and climate change at the forefront of everyone’s minds, customers are now keener than ever to explore more environmentally friendly ways to heat homes and buildings.

Low carbon heating systems are set to replace gas boilers; it will be a requirement in all new homes from 2025. The biggest challenge will be transitioning existing properties to greener alternatives. A huge market barrier for retrofitting eco-friendly heating is installation costs, which are significantly higher than that of a traditional gas boiler.

The government is introducing initiatives to help. The Boiler Upgrade Scheme offers upfront financial support towards the initial costs. 

This blog tells you everything you need to know about the scheme to keep your customers informed.

The Boiler Upgrade Scheme – what’s covered?

The Boiler Upgrade Scheme covers three low carbon heating systems. These are:

• Air source heat pumps: £5,000 off cost and installation.
• Biomass boilers: £5,000 off cost and installation.*
• Ground source heat pumps: £6,000 off cost and installation.

* The grant only applies to biomass boilers in rural locations and in properties that are not connected to the gas grid.

A key point that installers will need to relay to customers is the need to get in fast. The amount being invested in the scheme is capped at £450million. This means just 90,000 homes will be able to take advantage of the grant over the next three years.

How the scheme will work – what your customers need to know

Unlike the former Green Homes Grant, where customers made the application, you, as the installer, will be the one to apply for the Boiler Upgrade Scheme grant on behalf of your customers. It is an installer-led scheme.

You will also need to explain to customers that the new heating system must meet the full space heating and hot water requirements of the property and meet certain technical standards, such as minimum efficiency requirements. 

Your customer must be a homeowner or small business owner and the property where the new low carbon heating is to be installed must be in England or Wales. In addition, the property must have been issued with an Energy Performance Certificate (EPC) in the past 10 years, except for listed buildings where the property has an insulation exemption, or custom-built homes where eco-friendly building regs have been followed.

You will likely have to explain the eligibility rules and the valid paths to EPC to your customers. Remind customers they may still be eligible, even if they’ve received separate funding for energy efficiency upgrades, such as insulation, doors or windows.

The scheme is open to domestic and small non-domestic properties with an installation capacity of up to 45kWth (this covers most homes). Be sure to let customers know that there can be no outstanding recommendations for loft or cavity wall insulation. 

For customers interested in Biomass boilers, further strict criteria apply. The property must be in a rural area (where there are fewer than 10,000 residents) and have no mains gas connection.

The scheme is available for applications until April 2025. Remember, the total available funds are capped, so it’s worth mentioning this to customers who are dithering. Grants will be handed out on a first come first served basis, so you don’t want your customers to miss out!

Don’t forget to remind customers that now is a great time to take advantage, since VAT has been scrapped for heat pumps, along with other energy-efficient installs such as solar panels and insulation, for the next 5 years.

How the process will work

First, customers find an MCS certified installer, so make sure you or your company have up to date certification and that you are registered on the MCS directory. This is likely how you will receive new enquiries. You may also already be having these conversations with existing customers.

Once a customer (or potential customer) has contacted you about your installation options, you should offer advice about which low carbon heating options are covered by the scheme. If your customer wants to go ahead, you then offer a quote with the grant amount deducted (you can show the calculations on your quote form). 

The amount your customer will pay you will be the net amount after the grant has been deducted. You, the installer, apply for the grant. Vouchers are issued, which you then redeem through the government scheme once the installation and commissioning has taken place. Installers need to email Ofgem with the evidence required for a voucher redemption, including the MCS certificate number.

Let your customer know they will be contacted by Ofgem to consent to the application. This is to confirm that you are acting on their behalf. Once you apply, your customer will receive an email directing them to a consent form on the gov.uk site. Installers are notified of the outcome.

Vouchers are only valid for a set period – this is three months from the time of issue for air source heat pumps and biomass boilers, and six months for ground source heat pumps. So be sure your customer understands the timescales.

Going green, keeping customers happy

Most HVAC businesses will be developing their portfolio to include greener solutions. Read our blog on the pros and cons of heat pumps here.

Moving forward to greener heating alternatives, the obvious difficulty for customers is cost. The Boiler Upgrade Scheme is a start, but it’s still a drop in the ocean when it comes to retrofitting UK homes. Many people still can’t afford it, as the Boiler Upgrade Scheme grant only covers around a third of the cost.

Whether you have greener alternatives to gas boilers in your product portfolio yet or not, your customers will be asking you about it. Make sure you are up to speed with the details of the government’s Boiler Upgrade Scheme to keep your customers informed. 

Remind your customers that interest in heat pumps and other greener heating alternatives is growing. As the number of installations accelerate, it is likely that prices will come down. There is considerable pressure on government to introduce more far-reaching grant schemes, so watch this space.

Make quotes simple with Joblogic

Joblogic provides HVAC Field Service Management Software – the all-in-one management tool for keeping customers informed and meeting all of your engineers’ needs. Our field service quoting software makes administering grant deductions as easy as pie.