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Thousands of rural homes across England and Wales will be eligible for a £9,000 grant to switch to a heat pump from 21 July, after the government confirmed a 20% increase to the Boiler Upgrade Scheme. The announcement was made by the Department for Energy Security and Net Zero on 26 June 2026 and raises the maximum grant for households on heating oil from £7,500, a £1,500 increase aimed at helping families move away from volatile fossil fuel prices.
Letters are landing on the doormats of 200,000 eligible homes in England and Wales this week, setting out how to apply. The change takes effect from 21 July.
At a glance
- Grant increase: Boiler Upgrade Scheme grant rises from £7,500 to £9,000 for eligible households on heating oil
- Who qualifies: Households not connected to the gas network in England and Wales, currently relying on heating oil
- Start date: 21 July 2026
- How to apply: Through an MCS certified heat pump installer, who applies for the grant on your behalf
- Wider package: A £100m Social Housing Fund boost for solar and Great British Energy support for 100 more schools are announced alongside
Who can apply and how the scheme works
The Boiler Upgrade Scheme provides upfront grants to help households replace fossil fuel heating with low carbon alternatives. For those on heating oil, mainly rural properties with no gas connection the grant covers a substantial portion of the cost of installing an air source or ground source heat pump.
Households apply through an MCS certified installer, who handles the grant application directly. The government directs prospective applicants to the MCS Find an Installer tool to locate certified suppliers in their area.
What the grant covers
- New grant amount: £9,000 (up from £7,500) for heat pump installations
- Technology: Applies to air source and ground source heat pumps
- Eligibility: Property must be in England or Wales, not connected to the gas grid, and currently on heating oil
- Installer requirement: Must be MCS certified, the installer applies for the grant on the customer's behalf
- In force from: 21 July 2026
Why the government is acting now
Unlike households on mains gas, those on heating oil are not protected by the energy price cap. The government pointed to recent global price pressures as a driver of rising heating oil costs, leaving rural households particularly exposed to spikes in the fossil fuel market.
Minister for Energy Consumers Martin McCluskey MP said "This government is determined to bring down energy bills, but I know the war in the Middle East has hit households on heating oil especially hard. We have already taken action to support these households through confirming over £50 million in support for vulnerable customers on heating oil. Now, the Boiler Upgrade Scheme will help thousands of families across England and Wales switch to clean heat to protect them from volatile fossil fuels."
Heat pumps run on electricity rather than oil. The government argues that switching households to electricity based heating reduces their direct exposure to global oil price movements and, over time, gives greater certainty over running costs.
Industry reaction
Charlotte Lee, CEO of the Heat Pump Association UK, said the uplift would "make the transition significantly more affordable for the thousands of oil heated homes" and that the £9,000 grant would "help shield families from volatile fossil fuel costs, by using home grown electricity, in the years ahead."
Ian Rippin, CEO at MCS, described the measure as "an important step in making heat pumps more accessible to rural households." Matt Copeland of National Energy Action welcomed the direction while adding a note of caution "The real test will be whether this support reaches those most at risk and makes homes genuinely affordable to heat."
The heat pump grant increase sits alongside two further clean energy measures confirmed by the government the same day.
Other measures announced 26 June 2026
- Social Housing Fund boost: An extra £100 million to support up to 57,000 solar panel installations for social housing in England in this financial year, expected to cut bills by hundreds of pounds and help up to one million homes reach EPC grade C
- Schools solar expansion: Great British Energy is backing rooftop solar installations on a further 100 schools and colleges this year alone, building on an existing scheme
- Wider framework: Both measures sit within the government's Warm Homes Plan, which aims to roll out clean technology to millions of homes and secure what the government describes as good, long term jobs in the sector
The social housing solar programme targets lower income households in rented accommodation who are less likely to be able to fund efficiency improvements independently. The government says the funding will be made available in the current financial year.
Key Takeaways
- The Boiler Upgrade Scheme grant for households on heating oil rises from £7,500 to £9,000, a 20% increase from 21 July 2026
- Around 200,000 eligible homes in England and Wales are receiving letters this week on how to apply
- The scheme works through MCS certified installers, who apply for the grant on behalf of the customer
- Households on heating oil are not protected by the energy price cap, leaving them more exposed to fossil fuel price volatility
- Alongside the heat pump increase, a £100m Social Housing Fund boost will fund up to 57,000 solar installations in England in this financial year