Boiler Upgrade Scheme for business premises: who qualifies and how to apply

Is a business eligible?

Older commentary says the scheme is for homes only. That is wrong. GOV.UK’s guidance says: “You can use the grant to replace a heating system in your home or a building used for your business.” The scheme is open in England and Wales. Based on GOV.UK and Ofgem’s published guidance, the main conditions are:

• the property is in England or Wales;
• the applicant owns the property;
• the system being replaced is a fossil-fuel or direct-electric system, not an existing heat pump;
• the new heat pump is 45 kWth or less for a single heat pump (70 kWth for a multi-unit system) (or up to 300 kWth collectively for a shared ground loop); and
• the installer is MCS-certified.

There has been no insulation condition since 8 May 2024, and no valid-EPC requirement since 28 April 2026, so pages that still require either are out of date. Ofgem can issue vouchers until 31 December 2029 (S.I. 2026/390). Because eligibility details can change, check the current text on GOV.UK and Ofgem before you commit.

The 45 kWth limit and what to do above it

The limit is on the installed heat pump capacity, not on the building. A small shop, an office suite, a village hall or a workshop may fall within 45 kWth; a large office block, a hotel or a factory almost certainly needs more. Where your design heat load is above the limit, the scheme does not apply to that system, and the options are:

• check whether a modular design that splits capacity is allowed under Ofgem’s rules for your case, which is a question for the scheme administrator and your installer, not something to assume;
• look at other funding and tax relief, set out in the grants and funding guide, noting that PSDS Phase 4 and the IETF have closed; and
• use capital allowances, discussed in the cost guide and to be confirmed with your accountant.

Work out the load first. The sizing guide explains how, and why a floor-area rule of thumb can put you on the wrong side of the line.

How a business applies: step by step

1. Check the basics. Confirm you own the property, it is in England or Wales, and the existing system runs on fossil fuel or direct electric heating.
2. Establish the load. Get a heat-loss figure so you know whether the design is at or under 45 kWth.
3. Find MCS-certified installers. Check credentials on the public register at mcscertified.com. This site is a publisher; it does not install and holds no accreditation. If you send your details, they may be passed to one or more UK installers who can quote.
4. Get written quotes. Ask for the grant to be shown as a deduction, the design load, the flow temperature and the SCOP. Compare quotes on the same specification, as set out in the cost guide.
5. The installer applies. The MCS-certified installer submits the application to Ofgem on your behalf. You do not apply directly.
6. Installation and commissioning. The installer completes the work and the grant is taken off what you pay.

Ofgem’s page describes the process and current requirements; follow it over any summary, including this one.

The oil and LPG band

The grant is £7,500 for an air-to-water or ground-source heat pump. Where the property is off the gas grid and the system being replaced uses oil or LPG, the grant is £9,000. That higher band applies for installations from 21 July 2026 to 31 March 2027. After that date check GOV.UK for what applies. Other published values: £5,000 for biomass; £2,500 for air-to-air, which is residential only and so is not relevant to business premises.

A rural business running a boiler on heating oil is therefore the clearest case where the scheme meaningfully reduces the quote, and where a hybrid or full replacement is worth testing. For what the running cost looks like, use the calculator with your fuel price.

What the grant does and does not combine with

Whether the Boiler Upgrade Scheme can be combined with other grants, loans or schemes depends on the rules of each, and those rules change. Ofgem’s installer guidance says a property is not eligible if the heat pump has received any other grant from public funds towards its purchase or installation costs, so confirm any other funding with Ofgem before you rely on it. Beyond that, this page does not state a stacking rule. Check Ofgem guidance and the terms of any other scheme you are considering before you commit to either.

Tax relief is a separate question. A heat pump is an integral feature of a building, which is special-rate expenditure, so full expensing does not apply. The Annual Investment Allowance gives 100% relief in the first year up to £1m a year, and companies can claim a 50% first-year allowance above that. Whether a grant reduces the amount of qualifying expenditure is a tax-treatment question: take your accountant’s advice.

Common reasons an application stalls

Only reasons grounded in the published rules are listed here:

• The proposed system is above the Boiler Upgrade Scheme size limits.
• The applicant does not own the property, for example a tenant without the landlord’s agreement.
• The existing system is already a heat pump.
• The property is outside England and Wales.
• The installer is not MCS-certified.

Ofgem’s guidance has the full list and the current wording.